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Health Action NM opposes short-term junk plans

The following letter was submitted to the US Department of Health and Human Services on April 23, 2018.


To Whom It May Concern,


Health Action NM is a non-profit consumer advocacy organization that has served New Mexico since 1995. The organization has conducted extensive community outreach over the past several years to educate New Mexicans about new health coverage options under the Affordable Care Act (ACA). Our staff has held over 500 community events across 13 counties since 2013, reaching 17,000 individuals and families and connecting over 5,000 with enrollment assistance and health system navigation services.

The education and assistance provided by Health Action New Mexico gave our staff a deep understanding of the rural, underserved, and hardworking communities across our state and the struggles that they face as they attempt to get the coverage and care they need to stay healthy. There is a need for high quality, affordable health coverage in every community of our great state.

Prior to the enactment of the Affordable Care Act (ACA), people with pre-existing conditions could be denied coverage or charged exorbitant premiums in the individual health insurance market, leaving many of the sickest patients without any meaningful way to protect against the high cost of health care. President Donald J. Trump made numerous commitments to protecting people with pre-existing conditions, protections which enjoy support from a large majority of Americans.

The proposed regulations submitted by the Department of Health and Human Services regarding short-term limited duration plans violate the principle that people living with illness should not be subject to discrimination due to their health status. Moreover, according to the National Association of Insurance Commissioners, these regulations would have the effect of separating healthy people into a market that puts them at greater risk of facing financial hardship if they do become sick or injured, while increasing premiums in the ACA-compliant individual health insurance market that covers people with higher medical needs. The overall impact will be to shift costs towards individuals who are sicker.

According to a recent report by the non-partisan Kaiser Family Foundation, “Mid-year results from 2017 suggest the individual market is stabilizing and insurers in this market are regaining profitability. Insurer financial results show no sign of a market collapse. Second quarter premium and claims data from 2017 support the notion that 2017 premium increases were necessary as a one-time market correction to adjust for a sicker-than-expected risk pool. Although individual market enrollees appear on average to be sicker than the market pre-ACA, data on hospitalizations in this market suggest that the risk pool is stable on average and not getting progressively sicker as of early 2017.” We are on the verge of a stable individual marketplace that works for Americans. Segmenting healthier people out of the market will undermine the insurance that people who desperately need care rely upon.

Health Action NM recognizes the need to bring down health insurance premiums for Americans. However, we do not believe the correct strategy for achieving this goal is to shift costs to people with greater health needs and re-invent a system of discrimination against people with pre-existing conditions. Instead, the federal government should continue to encourage states to apply for reinsurance through a 1332 waiver, increase funding for outreach and enrollment, and request that Congress pursue cost-effective policy changes that will have positive effects on the individual marketplace.

We urge the department to rescind the proposed regulation.



Colin Baillio

Director of Policy and Communications

Health Action NM

Health Action