Study: Cancer patients face significant costs under short-term health plans 

A newly diagnosed cancer patient could face significant out-of-pocket costs if they’re enrolled in a short-term health plan, according to a new study. 

Research (PDF) conducted by Milliman on behalf of the Leukemia and Lymphoma Society found that a person with short-term coverage could face between $23,100 and $45,800 in out-of-pocket expenses in the first six months after a lymphoma diagnosis. 

By comparison, a newly diagnosed lymphoma patient in a plan that complies with the Affordable Care Act would face $6,300 in out-of-pocket costs on average, the study found. 

“The findings of this study confirm what we’ve long suspected—that the design of these plans leaves patients vulnerable to expensive bills,” said Gwen Nichols, M.D., the society’s chief medical officer, in a statement. “We urge cancer patients and their caregivers to ask questions about whether their treatments are covered by these plans, given their serious shortfalls.” 

RELATED: State approaches to short-term, association health plans vary, experts say 

A newly diagnosed lung cancer patient could pay more than $100,000 out-of-pocket if they lose their short-term coverage and become uninsured, the study found. 

Often derided by critics as “junk” plans, short-term health plans offer consumers an alternative to plans available on the ACA’s exchanges. Under the Obama administration, the length of these plans was limited to three months, while the Trump administration expanded that to 12 months in 2018. 

Officials argued at the time that these plans offered a lower-cost alternative to consumers amid rising ACA plan premiums, as they’re allowed to include a skimpier package of benefits. Critics, meanwhile, warn that the coverage could leave patients in the lurch for costly care and roil the already tumultuous individual insurance market. 

Studies have also shown that short-term plans market themselves as ACA replacements without making clear that they may cover less, which can confuse potential consumers. 

The policy expanding such plans has been challenged in court. 

RELATED: Older adults more likely to be drawn to short-term plans, survey finds 

The LLS-backed study also charted some of the critical differences between short-term coverage and an ACA-compliant plan. For example, the researchers found that a quarter of short-term plan members had a deductible higher than $7,900, which is the highest allowed under the ACA. 

Short-term plans can also refuse to re-enroll members who are diagnosed with a serious disease like cancer, the study notes. These patients may be left without insurance until the next ACA open enrollment period starts, depending on when their coverage ends. 

In states that embraced the short-term plan expansion, premiums on the ACA markets increased by 4.3% in 2020, the study found. In states that either curtailed or banned the expansion of such plans, ACA premiums instead declined by 1.2%. 

The researchers warn that states that allow the short-term plan expansion could lose 6% of their ACA market population in 2021. 

“Restricting short-term insurance should be a no-brainer for any lawmaker that wants to do what’s right for patients facing serious disease,” Nichol said.