Trump Administration Moves to Ease Rules on Short Term Health Insurance Plans

Trump Administration Moves to Ease Rules on Short Term Health Insurance Plans

Under a new proposed rule, insurers will once again be able to sell short-term health insurance plans for up to one year, a step that would further undermine the Affordable Care Act marketplace. These plans would be less expensive, as they would not have to meet the current federal standards for coverage and can require health screenings before purchase. Most of these short-term plans would exclude benefits for maternity care, preventive care, mental health services or substance abuse treatment, among other things.  The cheaper cost and screenings would attract a younger, healthier population to enroll, thus driving up premium costs in ACA plans. Seema Verma, who now heads the Centers for Medicare and Medicaid Services, estimates that 100,000 to 200,000 “healthy people” who now buy insurance through the marketplace would switch to the cheaper, short-term plans.

In a recent Health and Human Services Department (HHS) press release, entitled “Trump Administration works to give relief to Americans facing high premiums, fewer choices“, HHS Secretary Alex Azar states, “Americans need more choices in health insurance so they can find coverage that meets their needs. The status quo is failing too many Americans who face skyrocketing costs and fewer and fewer choices. The Trump Administration is taking action so individuals and families have access to quality, affordable healthcare that works for them.”

Yet, this couldn’t be further from the truth. As we see in the Medicare population, more choice often creates more confusion, and more complexity to navigate. This combination of confusion and complexity also often leads to more scams. In addition, this policy would not ensure that individuals and families have access to “quality, affordable healthcare”. Instead, it would allow access to cheaper plans for younger, healthier people. Yet for those who have any health condition and don’t qualify because of the health screenings, their premiums and health costs in ACA plans will go up even more, making quality health care less and less affordable. This would most likely negatively affect older adults who are nearing but not yet eligible for Medicare and who have one or more health conditions, thus making it difficult to afford coverage. This potential lack of health insurance or quality care would result in poorer health outcomes and ultimately increased program costs.

The House Democratic leader, Representative Nancy Pelosi of California, makes a good point in saying that people buying these cheaper short-term plans could be just “one diagnosis away from disaster, discovering they have been paying for coverage that may not cover basic care such as cancer treatment.” Senator Ron Wyden of Oregon, the senior Democrat on the Finance Committee, goes as far as saying the Trump administration was promoting “junk insurance.”

This proposed rule comes after an executive order issued in October to remove restrictions that the Obama administration put in place limiting these plans to three months. The rule also comes after Congress’ approval of tax legislation that in 2019 will end the penalty for people who choose not to have health insurance.

Join us in opposing this legislative change. You can submit comments on the proposed rule until April 23. Read more and submit your comments here.

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Our blogger Karen J. Fletcher is CHA's publications consultant. She provides technical expertise, writing and research on Medicare, health disparities and other health care issues. With a Masters in Public Health from UC Berkeley, she serves in health advocacy as a trainer and consultant. See her current articles.