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House of Representatives
Session of 2019 - 2020 Regular Session

MEMORANDUM

Posted:	September 30, 2019 12:04 PM
From:	Representative Wendi Thomas
To:	All House members
Subject:	Short-Term Limited Duration Insurance (STLDI)

In the near future, I plan to introduce legislation that would more adequately regulate short-term limited duration insurance (STLDI) plans and protect consumers through duration and renewability restrictions, underwriting limitations, and additional consumer disclosures. STLDI is meant to provide health coverage to individuals who have an unexpected gap in coverage or need health insurance coverage for a brief period of time, bridging a consumer to their next source of comprehensive coverage. However, these polices are now being deceptively marketed as an alternative to comprehensive major medical insurance policies. Consumers need to be fully aware that these plans do not provide comprehensive health coverage and may exclude coverage for critical care or severely limit what coverage they do provide. STLDI plans do not have to meet the minimum requirements for comprehensive coverage under the Affordable Care Act (ACA) and can exclude coverage for preexisting conditions or even deny coverage to an applicant due to a preexisting condition. Additionally, these plans are not required to cover essential health benefits, prescription drugs, maternity care, preventive services, and mental health or substance use disorder services. Many consumers purchase STLDI without a full understanding of the product’s limitations; and as a result, the Insurance Department has received numerous complaints from consumers who have purchased STLDI and subsequently received pennies on the dollar for their claims, or had their claims denied altogether. By limiting the duration of STLDI and preventing the renewability of these policies, the distinctions between STLDI and comprehensive health insurance policies will be more evident to consumers, allowing them to make an informed decision. Consumers need to be educated and cautioned that various forms of limited benefit coverage may be deceptively marketed as comprehensive coverage. I hope you will join me in cosponsoring this legislation to help protect and inform consumers when making an important decision regarding their health insurance coverage. The Pennsylvania Insurance Department supports this legislation.

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