Trump administration finalizes expansion of short-term health plans

Henrietta Strickland
August 5, 2018

Prior to the Trump administration's new rule, short-term plans were available for only three months with strict limitations on renewals. In response, Obama-era health officials in 2016 restricted the short-term policies to three months. Insurers will soon be allowed to sell these policies for just under a year.

This is pure politics, It overlooks the nature of the plans: they are short-term plans, not for everybody (this is not the plan you would purchase if you have a pre-existing condition), and they fill a niche.

Short-term plans join "association health plans" for small businesses as the administration promotes lower-cost insurance options that cover less. ACAP has long opposed this ... proposal as an arbitrary and capricious effort to do a regulatory end-run around the patient protections in the Affordable Care Act.

"To restore these to 364 days - as originally drafted - is exactly what we are looking for", said Jan Dubauskas, general counsel for the IHC Group, speaking before the final rule was released.

Short-term plans could roil the Obamacare market by drawing healthier consumers away from the exchanges and pushing up the premiums for those who remain.

Short-term plans are not beholden to federal regulations for health payer coverage, HHS noted. None covered maternity care, slightly more than one-quarter had prescription drug coverage, and slightly more than half provided mental health benefits - although such benefits typically have limits. Tell us about it here. However, they are reportedly a viable option for beneficiaries who are between insurance coverage - an individual transitioning jobs or a student taking time off from school, for example. And, unlike Obamacare policies, they don't have to cap consumers' cost-sharing burden at $7,350 for 2018.

With the three-month restriction on short-term plans, people's deductibles were reset every three months.

The goal was to ensure that everyone has access to quality health coverage without discriminating against those who have pre-existing medical conditions.

The administration estimates that premiums for a short-term plan could be about one-third the cost of comprehensive coverage.

A major insurer group expressed strong concerns.

Too few patients have been enrolling for healthcare via the individual market, HHS said, likely because of limited subsidized access to the exchange.

Ronnell Nolan, CEO of Health Agents of America, says she's happy her clients have a "viable option" now that the penalty for not having an ACA plan is being eliminated.

During the Obama administration, health officials became concerned that, as premiums for ACA health plans were becoming more expensive, some people were starting to rely on these alternatives as an end-run around the comprehensive coverage the law was created to promote.

U.S. Sen. Ron Wyden, D-Ore., was quick to react to final approval of the plans, saying they will hurt consumers: "By giving the green light to junk plans, Trump and his administration are once again siding with fraudsters, unscrupulous brokers and insurance companies over unsuspecting Americans that simply want affordable health care".

"'If we don't get it done" in Congress, President Trump has said, "we are going to watch Obamacare go down the tubes, and we'll blame the Democrats. and at some point, they are going to come and say, 'You've got to help us, '" the complaint alleges, adding that Trump has repeatedly stated that Obamacare is "essentially dead".

"We make no representation that it's equivalent coverage", said Jim Parker, a senior adviser at HHS. Pennsylvania's insurance regulator said some consumers complained about services that weren't covered, based on fine print in plan policies. Insurers in the individual market aren't allowed to spend more than 20% on these expenses.

President Trump has consistently declared that the Affordable Care Act - commonly referred to as Obamacare - is a broken mess, and after several unsuccessful attempts to repeal the national health care law, he has eagerly anticipated that it will "fail" and "implode". "These may be a good choice for individuals, but they may also not be the right choice for everybody". Other insurers were more neutral, and companies marketing the plans hailed the development.

The administration expects premiums for Obamacare plans to increase by 1% next year and by 5% in 2021 because of the shifts.

On Thursday, four cities wielded the president's remarks against him, in a lawsuit accusing Trump of deliberately undermining his executive obligation to "faithfully execute" the law in violation of the Constitution. Such plans can be offered across state lines and are also designed for self-employed people.

Other reports by Click Lancashire

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