Trump administration widens availability of skimpy, short-term health plans

Lynette PayneAug 06, 2018

The lawsuit will use quotes from President Trump, as well as tweets he has made, in order to show his intent in undermining the law, and it will try to convince a court to force the president into expanding ObamaCare enrollment, rather than trying to sabotage it. That means consumers may be able to stick with a plan for up to 36 months instead of shopping for a new plan each year.

Four states-Massachusetts, New Jersey, New York and Rhode Island-essentially bar sales of short-term plans, while others, including California, Hawaii, Illinois, Maryland and Minnesota, are considering or have passed restrictions on these plans.

Schumer said Democrats will introduce a resolution to rescind the rule using the Congressional Review Act, which allows Congress to revoke an administration regulation with a simple majority any time up to 60 legislative days after it is published in the Federal Register.

HHS issued a final rule on short-term health plans August 1. In response, Obama-era health officials in 2016 restricted the short-term policies to three months.

Short-term plans are less expensive because, unlike their ACA counterparts, which cannot bar people with preexisting health conditions, insurers selling these policies can be choosy - rejecting people with illnesses or limiting their coverage.

Short-term policies are available now, but consumers can only buy them for up to three months.

Five cities filed a lawsuit on Thursday accusing the Trump administration of violating the "Take Care" clause of the Constitution and the Administrative Procedure Act by chipping away at the Affordable Care Act in ways that have depressed health insurance enrollment and driven up costs for both individuals and taxpayers. "These plans aren't for everyone, but they can provide a much more affordable option for millions of the forgotten men and women left out by the current system". Next year, there will be no tax penalty for someone who opts for short-term coverage versus a comprehensive plan, so more people might consider the option.

More than 9,000 people and organizations commented on the rule, since February when it was first proposed.

A senior vice president, Justine Handelman said health insurance should be available and affordable for everyone, "regardless of their health status". Not a single short-term health plan studied covered maternity care whatsoever.

Coleman says the average use of short-term coverage was almost seven months, so many consumers were having their deductibles reset three times.

This action overturns an Obama administration directive that limited such plans to 90 days. In fact, these plans look a lot like the often all-but-useless private health plans that littered the individual market before the ACA reined in predatory and discriminatory insurance industry practices.

But short-term insurance clearly has fewer benefits.

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.

"Consumers should be assured that insurers will not deny claims for current medical care based exclusively on medical treatment received years earlier", Aetna said. Under the Obama administration, such plans were limited to three months' duration.

"For many who've got pre-existing conditions or who have other health worries, the ObamaCare plans might be right for them", Health and Human Services Secretary Alex Azar told "Fox & Friends". Chris Murphy, D-Conn. "That's simply not health insurance".

President Trump, pictured in July 2017.

The report says that premiums would vary considerably depending on geography and types of plans, and the focus in on the nationwide average.

The plans could also help lower deductibles for those who choose to buy them. 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.

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.

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