Federal appellate judges on Friday questioned Congress' intent for the role of short-term, limited-duration plans in the health insurance marketplace while weighing whether the Trump administration's 2018 expansion of the plans was legal.
The oral arguments before a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit came amid renewed focus on requirements for short-term, limited duration health plans during the COVID-19 pandemic. The plans are not required to cover COVID-19 testing without cost-sharing like comprehensive public and private insurance plans, can impose lifetime dollar limits on benefits and can deny coverage based on preexisting conditions.
A key point of contention was whether lawmakers intended to allow short-term, limited-duration plans to compete with exchange plans by offering coverage that does not comply with ACA requirements.
The Association for Community Affiliated Plans, representing not-for-profit health plans invested in the Affordable Care Act exchanges, argued that lawmakers did not intend for short-term, limited-duration plans to draw beneficiaries away from exchange plans.
The argument appeared to resonate with U.S. Circuit Judge Judith Rogers.
"If the rule is allowed to stand, it's saying that Congress also contemplated setting up a system that will draw many more millions of people out of the health system that Congress thought would provide better care," Rogers said.
The expansion of short-term, limited duration plans, which was finalized in August 2018 and in effect since early October 2018, allows up to 12 months of coverage through short-term plans. People can renew this coverage for up to 36 months. A U.S. District Court judge in July ruled the expansion was legal.
U.S. Circuit Judge Thomas Griffith challenged the premise that the Affordable Care Act was intended to create a single risk pool by pointing out that the law included exceptions for plans that were in place before the ACA was signed.
"I don't think it's a fair reading of the ACA to say it was creating a single risk pool," Griffith said.
U.S. Circuit Judge Gregory Katsas said he interpreted lawmakers' intent in the ACA to be that more people got insurance coverage, not to make low-income people choose between more costly, comprehensive exchange plans or no insurance coverage at all.
"It is a little bit odd to impute to a Congress that wants people to get more insurance rather than less, to force those people into the option of nothing," Katsas said.
The actual damage done to exchange marketplaces was a flashpoint in the lower court arguments, and ACAP maintained its argument that allowing short-term, limited-duration plans would disrupt the ACA market. But Griffith was skeptical.
"In fact, the rule hasn't destabilized the exchanges, has it?" Griffith asked.
Oral arguments were held by telephone, an extraordinary measure taken because of the COVID-19 public health emergency.