By Judy Packer-Tursman

Starting April 1, payers who decide to sell short-term limited duration (STLD) health benefit plans in Colorado must offer products covering essential health benefits mandated by state law. Short-term plans also won’t be able to deny applicants based on their health status: They must be guaranteed issue.

But one basic element will remain unchanged: STLD plans being sold in Colorado, as elsewhere, won’t cover pre-existing conditions.

Spokesperson Vincent Plymell of the Colorado Division of Insurance tells AIS Health that the state’s action is “about enhancing consumer protections for people who truly need a short-term plan.”

Attorney Katie Keith, a research professor at Georgetown University’s Center on Health Insurance Reforms, notes the fast turnaround time for the Trump administration’s 2018 rule relaxing restrictions on STLD plans gave scant time for states to enact laws and make regulatory changes to protect markets.

The idea behind Colorado’s regulatory action on short-term plans “is it cuts the incentive for companies to come in and cannibalize the market,” Keith says. “I think it disincentivizes companies to come in and sell a cheap product [and] keeps out some of the ‘bad actors.’ Making it a little more burdensome is probably a good thing.”

Yet, Keith adds, “Covering the benefits is one thing, but if they [i.e., short-term plan sponsors] can still exclude pre-existing conditions, that could still be a problem” for consumers who might be tempted by STLD plans’ low premium rates without understanding the product’s limitations.