Trump administration finalizes expansion of short-term health plans

Enlarge this image

Enlarge this image

Earlier Wednesday, the Trump administration said it's clearing the way for health insurers to sell short-term plans as a low-priced alternative to pricey Obama-law policies for people struggling with high premiums.

There has been a huge and utterly predictable outcry over the Trump administration's move to ensure that cheaper health insurance policies are available to the appropriate customers.

The plans don't have to comply with Affordable Care Act rules including: coverage of essential benefits; prohibition against medical underwriting; limits on premium variations based on age, sex or health status; elimination of annual and lifetime benefit caps; annual limits on out-of-pocket costs; and the requirement that plans spend no more than 20% of premiums on administrative costs and profit.

Azar said the new plans are tailor-made for the 'gig economy'. These rule changes represent his attempts to "reinvent and transform the system we have (with) the tools we have at our disposal" in a way that gives "as many options to individuals as possible".

Short-term plans join "association health plans" for small businesses as the administration promotes lower-cost health care options that cover less.

But the policies don't have to cover existing medical conditions and offer limited benefits.

Loosening Obamacare's rules protecting those with pre-existing conditions also risks a backlash from the public since these protections are among the health reform law's most popular provisions. Jeanne Shaheen, D-N.H., call them "junk plans".

They are suing to force the administration to restore the funding that was slashed for outreach and enrollment assistance, extend the 2019 open enrollment period, and steer people towards comprehensive ACA plans and away from skimpy short-term plans that do not cover pre-existing conditions. Almost nine out of 10 plans sold on the marketplace are subsidized based on an individual's income. However, since almost nine in ten ObamaCare enrollees are eligible for subsidies, according to the editorial, they will make the choice to remain with ObamaCare.

Previously, under the Affordable Care Act, short-term plans were limited to three months. According to American Health Insurance, this freeze will cause escalating healthcare costs especially to those who need it the most. That means if a plan had a $1,500 deductible, it would in effect become a $6,000 deductible during a year.

Association for Community Affiliated Plans CEO Margaret A. Murray said in a prepared statement: "Fake insurance is no substitute for real coverage".

As more healthy people hop on cheaper short-term plans, the overall make-up of the ACA markets will be sicker and more expensive to cover for insurers.

Today a new lawsuit is being filed by the cities of Baltimore, Cincinnati, Chicago and Columbus, arguing that President Trump's actions against the Affordable Care Act violate the U.S. Constitution.

Federal health officials say the plans can last for up to 12 months and may be renewed for up to 36 months.

But short-term insurance clearly has fewer benefits.

Insurers will again be able to sell short-term health insurance good for up to 12 months under final rules released Wednesday by the Trump administration. And because healthy people could be expected to gravitate toward these alternatives, or drop coverage altogether once the mandate's penalties end, ACA marketplaces would be saddled with a greater share of people with health conditions, driving up premiums for ACA health plans by almost one-fifth in 2019. "Our clients can't continue to pay rate increases in the double digits". A short-term plan ran about $124 a month on average in the last quarter of 2016, while an unsubsidized ObamaCare plan averaged $393.

But Oregon consumers should take note: The state allows these short-term plans for three months but then the insurer must wait 60 days before issuing another short-term plan to the same policyholder.

The plans, which have been available for years and were originally created to fill a temporary gap in coverage, will likely be cheaper than Obamacare policies.

What's your healthcare coverage experience?

Recommended News

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.