AARP Texas Opposes Legislation Allowing Health Plans Without Preexisting Condition Coverage

Texas legislators have filed several bills this session that would authorize health policies that don’t have to pay for basic medical services and can deny coverage to people with preexisting conditions.

Opposed by AARP Texas and several other consumer groups, the bills create or expand “insurance-like” coverage that is exempted from many state and federal health insurance regulations and which – unlike regular health insurance plans -- can cherry-pick healthy customers.

“These plans are proven to drive up costs for older Texans and those with preexisting conditions,” said Blake Hutson, an associate state director of AARP Texas and who is lobbying against the measures.

Among the bills in question are House Bill 3924 and Senate Bill 1973, which allow the so-called “skimpy” health coverage to be sold through Farm Bureau health plans. A related bill (HB 3752) would allow more of this same coverage that can deny coverage or charge more for your preexisting conditions to be sold through Texas Mutual plans.

Hutson said insurance-like products that are exempt from the Affordable Care Act’s protections for people with preexisting conditions and benefit standards may seem like a bargain until you get sick or injured. That’s when these products can expose people to catastrophic costs and medical debt, he said.  Further, these non-insurance products can have lifetime or annual limits on coverage, and aren’t subject to a cap on total annual out-of-pocket costs for consumers.

“Expansion of skimpy plans is an attack on widely popular consumer protections in health coverage,” said Hutson. “Among the hardest hit will be older Texans who purchase coverage on the individual health insurance market and those who have a preexisting condition. Health coverage should be available and affordable for everyone, regardless of their health status.”

What’s more, critics of the plans say, these dangerous coverage options are unnecessary given recent increases to subsidies on the individual health insurance marketplace where people are guaranteed coverage for their pre-existing conditions. Income limits for these affordability subsidies have been lifted under newly passed federal legislation.

The proposed skimpy health plans won’t have to adhere to consumer-protection laws for surprise medical billing, in addition to being able to charge more or deny coverage for preexisting conditions. They also can be sold without providing coverage for mental health care services, and they won’t have to meet requirements to have an adequate network of health care providers.