Trump expands use of 'short-term' insurance from 3 months to full year

Trump expands use of 'short-term' insurance from 3 months to full year

Trump expands use of 'short-term' insurance from 3 months to full year

While the Trump administration is making an important move to increase choice and access to affordable health insurance, the proposal does not address the fact that short-term limited duration plans are not renewable. Short-term policies do not have to provide the "essential health benefits" that are required by the health care law.

But the administration can only do so much to expand choices and offer Americans access to affordable, individualized care.

"Bottom line: This is a green light to discriminate against Americans with pre-existing conditions that's going to make quality health insurance more expensive and less accessible", said Oregon's Ron Wyden, the top Democrat on the Senate Finance Committee, which oversees many health-care issues.

Verma said Tuesday that her department's independent actuaries predict that just 100,000 to 200,000 people will shift from the ACA individual market to these short-term plans, and insisted that shift will not significantly impact premiums for the people who remain because they need comprehensive insurance.

Under current rules, such "short-term, limited-duration insurance" can not last for more than three months. These short-term policies typically have higher out-of-pocket costs and cover fewer services than traditional insurance. They also don't have to include benefits mandated by ACA plans such as prescription-drug coverage.

Due to their skimpiness, the plans tend to be cheaper than the cheapest offerings in the Obamacare individual marketplaces. It also requires insurance companies to cover anyone who wants to buy a policy and charge the same premium to everyone in a community. The number of people in short-term plans grew from 144,000 individuals in 2015 to 160,000 in 2016, according to a recent National Association of Insurance Commissioners report. On a conference call with reporters, they repeatedly said that many consumers had only one choice of insurer in their Obamacare market and that premiums had skyrocketed since the exchanges opened in 2014.

Dow higher as Wall Street starts week in better mood
Technology companies and banks, some of the biggest winners on the market over the past year, are up the most. Fears of more aggressive interest rate hikes were one of the triggers of last week's stock market sell-off.

At a press briefing later, he added that the plans might be especially attractive for people who are between jobs, or who aren't eligible for Obamacare subsidies and live in areas with few affordable options.

The Department of Health and Human Services (HHS) said the rule would help people who have been struggling with high premiums of plans many see as overly generous.

"We shouldn't be in the business of providing people with worse care", said Sam Berger, a former Obama aide now with the liberal Center for American Progress. These junk plans can deny payment of medical bills for a range of common health care services - from prenatal care to urgent care following a child's accident on the soccer field - sticking consumers with the bill for care not covered by their plan.

The new rule will not be official until after a 60-day commenting period, and as with most tweaks to the Affordable Care Act, it is likely to face lawsuits.

Those with short-term policies are not considered insured under the Affordable Care Act and are subject to the penalty for not having coverage. This would've meant buyers would be responsible to paying the penalty for violating the ACA's individual mandate, but that penalty won't exist after this year thanks to a provision in the tax cut legislation passed late in 2017. While the proposed rule limits the duration of the short-term plans to 12 months, the HHS is asking for input on whether the length should be some other duration. "As soon as the executive order came out, we were on top of it", he said.

Related news