Short-Term Health Plans Can Lead to More Than $100k in Out-of-Pocket Cancer Costs

Having affordable and adequate health insurance is key to better outcomes for patients diagnosed with cancer. Individuals who are uninsured or have inadequate coverage are less likely to undergo cancer screenings and more likely to be diagnosed when the disease has reached an advanced stage.

Short-term health plans are available for individuals who are experiencing a gap in insurance coverage. Although they provide low premiums, these plans are not required to offer comprehensive coverage. The Trump administration last year finalized a regulation to expand access to short-term coverage. With this final rule, short-term plans can be expanded for up to 36 months.

Because of limited coverage, patients who are insured by short-term plans and are diagnosed with cancer could face significant out-of-pocket costs, according to a new analysis from the American Cancer Society’s Cancer Action Network

The analysis showed patients insured under short-term health plans who later develop cancer may have out-of-pocket costs of more than $100,000. For the study, researchers examined short-term plans in 6 states: Florida, Illinois, Maine, Pennsylvania, Texas, and Wisconsin with durations from 3 months to 1 year to determine the extent of coverage that would be offered to a hypothetical insured woman who later develops breast cancer.

In the hypothetical model, the total cost of treating breast cancer for the first year was estimated to be $179,229.41, according to the study. Health care costs were highest in the month following diagnosis. Overall, the patient’s out-of-pocket costs would vary by duration of short-term plan.

• 3-month plan: The plan would cover a little less than $60,000 in services and the enrollee’s share of the treatment would amount to more than $111,000, plus an additional $363.90 in premiums.
• 6-month plan: The plan would cover approximately $106,000 worth of the enrollee’s treatment. The enrollee would incur more than $63,000 in cost-sharing related to her treatments and an additional $1570.56 in total premiums.
• 12-month plan: This plan provided the most coverage, but still left the enrollee with more than $40,000 in cost-sharing, plus monthly premiums that totaled $31,184.52.

The study demonstrated that, no matter which short-term plan the patient had, they would still face significantly higher out-of-pocket costs.

“While premiums for short-term plans are generally lower relative to ACA plans, our analysis shows that short-term plans actually expose enrollees with serious illnesses to higher out-of-pocket cost,” the authors wrote.

According to the authors, many consumers likely do not understand that short-term plans have limited coverage and expect the patient protections provided under the Affordable Care Act, which can lead to higher costs in the event of an unexpected diagnosis of a serious illness.

Reference

American Cancer Society Cancer Action Network. Inadequate Coverage: An ACS CAN Examination of Short-Term Health Plans. May 13, 2019. https://www.fightcancer.org/sites/default/files/ACS%20CAN%20Short%20Term%20Paper%20FINAL.pdf. Accessed May 14, 2019.