Wisconsin examines short-term health plans

Fewer Wisconsin residents are enrolled in short-term health plans since 2019, and those plans have a rate of claim denials that far exceeds that of health plans offered on the Affordable Care Act marketplace in that state.

Those were among the key findings in a report evaluating the usage and impact of short-term limited duration plans in the Wisconsin market. STLDPs are insurance products designed to provide coverage as a bridge between other health coverage sources for a limited period until an individual can obtain comprehensive coverage. STLDPs are not subject to ACA protections so carriers are able to impose exclusions based on pre-existing conditions and take other action that limits their insured pool.

“This report provides important insights into the enrollment rates, product design, and marketing practices of STLDPs,” said Wisconsin Insurance Commissioner Nathan Houdek, whose office released the report.  “Understanding the impact of these plans in the broader health insurance marketplace will help us better serve and protect Wisconsin consumers.”

Among the key findings in the report:

• In 2021, 12 insurers sold STLDPs in Wisconsin with 10,310 enrolled members. This is an increase from 10 carriers in 2019.
• STLDPs sold in Wisconsin offer plans of varying length ranging from 30 to 364 days.
• STLDP enrollment has been decreasing in recent years. Wisconsin carriers report 10,310 enrolled members in December 2021, compared to 13,731 reported enrolled in December 2019.

The drop in STLDP enrollment may be due to the COVID-19 public health emergency, increased federal funding for ACA plan outreach, expanded federal subsidies for ACA plans or other factors.

• Consumers aged 55-65 account for the largest group of members enrolled in STLDPs, making up one-quarter of STLDP enrollees. The 26-35 age group is the next largest group of enrolled members, accounting for about one-fifth of enrollees. This group includes those most likely to face a disruption in insurance coverage with a recent loss of eligibility for coverage under their parents’ plans. Consumers aged 18-25 represent the smallest portion of those enrolled in STLDPs. This may reflect their continuing eligibility for coverage under their parents’ plans, and access to other sources of low-cost coverage via ACA catastrophic plans and college-sponsored student health plans.

• STLDP enrollment is highest in the northeastern and southeastern regions of the state.
• The statewide average premium for STLDPs in 2021 was $157 per month.
• Nearly all STLDPs in Wisconsin cover prescription drugs and cancer treatment, but less than half cover mental health and substance use treatment, and none cover maternity care.
• The STLDP rate of claims denials, 31.3%, far exceeds the average denial rate for in-network claims by Wisconsin’s ACA Marketplace plans which was reported at 11.7% for 2021.

“Thousands of Wisconsinites utilize STLDPs, and we want to ensure that those consumers are informed about the scope and limitations of these plans,” said Houdek. “Consumers have a lot of choices for coverage in our competitive health insurance marketplace. They may even qualify for a $0 plan on the federal exchange, so we encourage everyone to shop around and understand all their options before enrolling in coverage.”

Gov. Tony Evers launched the DHS OCI Health Care Coverage Partnership in 2019 to improve coordination around outreach and education, increasing enrollment and health insurance literacy, and improving enrollment retention. This Partnership developed WisCovered.com as a digital resource for Wisconsinites to learn more about their coverage options and get connected with free, local experts that can help them understand their health insurance coverage options and get enrolled.