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Durangoan Lauri Costello grew frustrated with the for-profit health insurance system and took matters into her own hands: She cobbled together her own health plan using short-term and supplemental insurance coverage.

“I am so upset with the system; I am not willing to play their game,” she said.

Costello, a retired physician, spends about $220 a month for short-term medical insurance with a $10,000 deductible. In case of a major accident, she also purchased supplemental insurance through Aflac for $50 per month. Aflac will pay her cash if she gets sick or injured, money she can use to pay her medical insurance deductible or other health expenses.

But Costello’s short-term plan doesn’t cover wellness visits to her doctor and other basic coverage. That will change April 1 when new rules aimed at improving the quality of short-term plans will take effect. But the new rules are also expected to dive up costs for people like Costello, who have pieced together their own plans.

Short-term insurance plans have existed for a long time. They were designed to cover customers who lost a job, recently graduated from college or were otherwise in need of coverage for a limited time.

The plans recently received more national attention as an alternative to high costs some people pay for insurance through the state health exchanges, such as Connect for Health Colorado.

The plans made national headlines in August when President Donald Trump’s administration extended the maximum amount of time a consumer can have short-term health plans to one year with the option to purchase short-term plans for three years.

Previously, federal rules limited short-term health insurance coverage to 90 days.

States can also write their own rules to govern short-term medical plans. In Colorado, consumers can have two six-month-long insurance plans for 12 months in an 18-month period, said Vincent Plymell, assistant commissioner for the Division of Insurance.

Short-term plans also provide limited coverage.

“People should still go into it with eyes wide open and know the limitations,” he said.

For example, if a patient developed a medical condition while covered by the first short-term plan, the second plan may not cover the condition because it would be considered a pre-existing condition, he said.

The division does not have data on how many state residents are covered by short-term health insurance, but division staff don’t believe it is a large number, Plymell said.

The division announced rules in January aimed at requiring better coverage from short-term plans. As of April 1, the plans must cover health benefits such as preventive services, prescription drugs, hospitalization and maternity and newborn care, according a news release from the Division of Insurance.

The plans will not be required to cover pre-existing conditions.

Durango insurance broker Chris Lange said he expected the rules would drive up costs and deter Coloradans from purchasing health insurance.

“A lot more people are going to keep their fingers crossed and hope for the best,” said Lange, owner of Integrity Insurance and Financial Services.

While Costello is a short-term insurance customer, she said she would like to see health care reform that would provide universal health care coverage.

“When you do health care for profit, you lose equity,” she said.

mshinn@durangoherald.com