Skinny health plans are getting a new look under insurance rules issued Wednesday by the Trump administration.

Short-term, limited duration health insurance coverage has always been available to consumers. What’s different now is the plans, which cost less than comprehensive coverage, can be written for a year, then renewed up to three years — terms that had been prohibited under the Affordable Care Act of 2010.

The hitch: Skinny plans get their name from their limited benefits. Consumer advocates worry that people will mistake the plans for comprehensive coverage, leaving consumers with big medical bills for medical services they thought were covered.

“Skinny plans are a somewhat nice way of saying they really just don’t cover a whole lot,” Pennsylvania Insurance Commissioner Jessica Altman said Monday. “They are not meant to be a long-term substitution for major medical insurance and to pretend they are is simply wrong.”

In a prepared statement, Health and Human Services Secretary Alex Azar said the rule changes will create more affordable health insurance options for consumers.

“President Trump is bringing more affordable insurance options back to the market, including through allowing the renewal of short-term plans,” Mr. Azar said. “These plans aren’t for everyone, but they can provide a much more affordable option for millions of the forgotten men and women left out by the current system.”

Until the rule change, limited benefit health insurance could be sold for terms lasting no longer than 90 days — making them useful for people between jobs or other events where gap coverage was needed.

The rules greatly expand term limits for the policies, making them more like ACA health insurance, but unlike ACA coverage, the skinny plans are not required to cover essential health care benefits such as maternity, substance abuse treatment and prescription drugs.

Another difference: ACA plans ignore a consumer’s pre-existing health conditions in setting premiums. Skinny plans do not, so coverage can be denied based on health issues and premiums can reflect a consumer’s medical history.

A Kaiser Family Foundation study found 71 percent of limited benefit health plans did not cover outpatient prescriptions; 62 percent did not cover mental health or substance abuse treatment; and none covered childbirth-related care.

An estimated 133 million Americans have pre-existing medical conditions, which could disqualify them from limited benefit coverage, according to the foundation.

In comments to the Centers for Medicare & Medicaid Services in April, Pittsburgh-based UPMC Health Plan worried about the potential for increased market volatility the rule changes could bring.

“When market rules don’t establish a level playing field for competing insurance products, risk pools become fragmented and the predictive value of actuarial principles that undergird the entire market can be adversely impacted,” UPMC wrote.

“Endorsing short-term, limited duration as a comparable alternative to comprehensive coverage is misleading to consumers and will institutionalize damaging market fragmentation that increases the cost of comprehensive coverage for millions of Americans,” UPMC said.

The Blue Cross Blue Shield Association, which represents Highmark and other Blues plans, had similar concerns.

“We have significant concerns that allowing short-term, limited duration plans to be offered on a 364-day basis would further destabilize the already fragile individual insurance market and cause rates to increase for those who need or want comprehensive health coverage,” the association wrote to CMS in April.

“Congress, the administration and the states should work to stabilize the individual market — not simply create a parallel market that works only for healthy people.”

The Congressional Budget Office in May predicted that 2 million people would enroll in skinny health insurance plans.

Kris B. Mamula: kmamula@post-gazette.com or 412-263-1699

First Published: August 2, 2018, 12:30 p.m.