Short-Term Limited Duration (STLD) Health Plans

Where We Stand

NAMI believes that all people with mental health conditions deserve accessible, affordable, and comprehensive health care. NAMI supports laws and policies that limit the sale of short-term limited duration health plans.

Why We Care

For people with mental health conditions, having accessible, affordable, and comprehensive health insurance is critical for getting the mental health care they need. The Affordable Care Act (ACA) established numerous consumer protections which helped halt discriminatory practices and expanded health coverage options for people with mental illness.

In contrast, short-term limited duration (STLD) health plans don’t have to follow ACA guidelines and can discriminate against enrollees with mental illness while leaving them few options when they need care. Specifically, STLD plans can:

• Reject applicants based on their mental health condition
• Charge people with mental health conditions more
• Exclude coverage for pre-existing conditions like mental health
• Not cover mental health and substance use benefits

In fact, prior research suggests that nearly 50 percent of STLD plans available do not cover mental health care. Additionally, many STLD plans are sold using deceptive practices. This is particularly problematic because STLDs tend to have lower premiums and are often attractive to seemingly healthy young adults. Yet, an STLD plan may not provide the coverage needed if a young person experiences a mental health crisis, which often occurs during adolescence and early adulthood when first symptoms of mental illness typically appear. This can saddle individuals and families with high out-of-pocket costs or keep people from getting the care they need. In short, STLD plans fail to protect people with mental health conditions.

Federal rules issued in 2018 expanded the availability of STLDs, which were previously intentionally limited. This put people with mental health conditions at a greater risk for increased costs, insufficient coverage, financial instability, and unmet health needs. Legislative or regulatory efforts that limit the sale of STLDs are needed to best support the mental health needs of all Americans.

How We Talk About It

• For people with mental health conditions, having accessible, affordable, and comprehensive health insurance is critical to get the mental health care they need.
• The Affordable Care Act (ACA) opened the door for many people with mental health conditions and substance use disorders to gain health coverage that included important consumer protections.
• Unfortunately, there are some health plans that do not have to include the ACA protections and are still not required to offer mental health care, like short-term limited duration (STLD) health plans.
• STLD plans, often called “junk insurance,” offer fewer benefits like prescription drugs or mental health care, and do not have to meet the same minimum standards of coverage as most plans.
• STLD plans harm people with mental health conditions by undermining access to comprehensive, affordable coverage through discriminatory practices.
• Many people who buy STLD plans don’t realize they may have little or no mental health coverage. This leaves individuals and families to pay out-of-pocket to get the mental health care they need — or go without mental health treatment entirely if they can’t afford to pay for it.
• Recent regulations have increased the availability of STLD plans, putting individuals with mental health conditions and their families at risk for increased costs, insufficient coverage, financial instability, and unmet health needs.
• NAMI believes that all people with mental health conditions deserve accessible, affordable, and comprehensive health care. We can’t go back to a time when life-saving mental health treatment was limited or unavailable, and we support efforts to limit the availability of STLD health plans.

What We’ve Done

• NAMI statement applauding proposed rule to rein in short-term plans
• NAMI report, Under-Covered: How Insurance-Like Products Are Leaving Patients Exposed
• NAMI report, Short-Term Plans Do Not Cover Life-Saving Mental Health and Substance Use Treatment
• NAMI blog on short-term limited duration plans
• NAMI press release on filing a lawsuit against the short-term, limited-duration plan final rule
• NAMI report, State Legislation Report: Trends in State Mental Health Policy (2019), which includes examples of legislation addressing patient protections in state-regulated plans.
• NAMI policy on mental health parity