Health advocates say a short-term insurance bill signed into law by Arizona Gov. Doug Ducey on Monday could hurt consumers who buy what critics call "junk" plans.

"One of the things that's appealing about these plans is that they are usually pretty cheap and there is a reason why — they don't cover much, and that is by design," said Brian Hummell, director of government relations for the American Cancer Society's Cancer Action Network.

The Arizona law, set to take effect 90 days after the current legislative session ends, extends the current maximum time for having a short-term plan under state law from one year to three years.

Backers stress that the short-term plans have long existed in Arizona. The only thing the law does is extend the maximum allowable time to be enrolled in one, and the plans are better than having no insurance at all, supporters say.

Critics denounce the short-term plans as "junk" and "scam" insurance. They say increasing the contract time only enables insurers to financially benefit at the expense of consumers.

The Arizona law matches a new rule issued by President Donald Trump over the summer, which extended the allowable time on short-term plans up to a year, but allows insurers to renew those plans for up to three years.

Some states responded by making their own laws restricting short-term plans. California has banned short-term insurance plans altogether and Delaware issued rules limiting short-term plans to three months, with no extensions or renewals.

"They are called short-term limited duration plans for a reason," Hummell said. "They are intended to be gap insurance, for periods when someone has lost a job, is between jobs or in a probationary period for whatever reason. ...Three years is not really a gap."

Sponsor sees need for 'niche market'

The original bill, Senate Bill 1109, was sponsored by Sen. David Livingston, R- Peoria, who said it was a good option for people who find COBRA too expensive, for people needing a bridge while they switch jobs, or for people taking early retirement who need a bridge to Medicare.

It's better than people going without health insurance altogether, which is a worse option, he said.

"It's best practices conforming to the federal laws," Livingston told the Senate Finance Committee, which passed the bill 6-4 on Jan. 30. "We are not going to sell hundreds of thousands of these. ... This is a niche market, but there's a need for this niche market."

Supporters, who include Blue Cross Blue Shield of Arizona, the Arizona Association of Health Underwriters and the Greater Phoenix Chamber of Commerce, say it makes sense for Arizona to match federal law.

It also makes sense, they say, to give an option to consumers who feel priced out of the regular market or who want a plan outside of regular enrollment periods.

About 10 percent of Arizonans don't have health insurance, which works out to a significant number of people here — about 680,000, according to the most recently available data from the Kaiser Family Foundation.

"I think these are probably designed for younger, healthier people who maybe have a part-time job, or something where they are really cost-conscious," lobbyist Marc Osborn said Feb. 14 on behalf of the Arizona Association of Health Underwriters during a House Health and Human Services Committee hearing on the House version of the bill. "They are not for everyone, but they are another tool."

Opponents representing public health and patient groups, including the Arizona Public Health Association, the American Heart Association and the American Lung Association, say people who don't read the fine print of insurance policies could be unwittingly signing onto plans that will end up leaving them uncovered if a serious illness arises.

Ducey spokesman: Law gives consumers more health-care options

Asked why he signed SB 1109, Gov. Doug Ducey issued an emailed statement through spokesperson Patrick Ptak that says the bill includes a requirement that the short-term policies include a disclosure of the plan's limitations and exclusions.

Ptak noted that 14 other states are already conforming to the new federal limits.

He also provided numbers that indicate the bill won't affect most Arizonans, citing 2017 numbers from the Kaiser Family Foundation that show more than 80 percent of the state's residents get their health insurance either through their employer or the government insurance programs Medicaid and Medicare.

“Governor Ducey strongly supports ensuring that Arizonans with pre-existing conditions have access to affordable, quality health care," Ptak wrote. "This legislation simply provides consumers additional options to choose from in the health care market. It does not limit health care nor does it jeopardize plans already in place.”

Short-term plans allow insurers to exclude benefits that must be covered under the Affordable Care Act, such as maternity care, mental health care, and pre-existing conditions.

"The take-home message is really for those folks who are considering buying one of these plans, to really, really check into the fine print before they buy anything," said Will Humble, executive director of the Arizona Public Health Association.

Humble said the monthly premiums may be cheaper, but consumers could find themselves with higher deductibles and co-pays and in some cases, faced with an expensive medical bill that their insurance plan won't cover.

"It may not be what you think it is. In fact, it's probably not what you think it is. ...The short-term plans will most likely not cover pre-existing conditions, so that is one thing to really look out for if you are ever considering buying one of these plans," Humble said.

Insurance Dept.: Not government's role to second-guess consumers

In its 2017-18 annual report to Ducey, the Arizona Department of Insurance listed the introduction of short-term benefit policies as having the potential to attract Arizonans away from traditional insurance into less expensive products that offer "substantially less benefit."

The department was neutral on SB 1109, but did issue a statement on it that says short-term insurance plans are not a threat to Arizonans as long as the plans come with proper disclosures outlining the specifics of those plans to consumers — a provision that is included in SB 1109.

"Consumers should have choice in the healthcare marketplace," the insurance department statement said. "If a consumer chooses a short term plan that comes with the appropriate disclosures, it is not the role of government to second guess that consumer's choice."

Critics see it differently. Extending the allowable time on short-term health insurance plans is part of a national effort to sabotage the Affordable Care Act and repeal protections for Americans with pre-existing conditions, said Charlene Fernandez, D-Yuma, the House minority leader, as she joined other critics of SB 1109 outside the Arizona Capitol on Tuesday.

"We had hoped to convince him (Ducey) to veto this bill, but now we need to warn consumers about all of these plans," she said. "In particular, they don't meet the ACA's provision that insurance companies cannot discriminate or deny coverage to Americans with pre-existing conditions."

Sen. Lupe Contreras, D-Avondale, is worried Arizonans will begin using short-term plans as regular insurance.

"I don't want us to start something that could cause grief to a lot of people," Contreras said during the Senate Finance Committee hearing.

Reach the reporter stephanie.innes@gannett.com or follow her on Twitter: @stephanieinnes.