In another effort to rollback former President Barack Obama’s signature healthcare law, President Trump approved a proposal released Tuesday allowing for the expansion of short-term health insurance plans.
Under new HHS rules, Americans will now be allowed to purchase short-term health insurance plans for up to 365 days. Obamacare prohibited Americans from purchasing plans exceeding three months.
The Trump administration is also weighing the possibility of allowing short-term health plans to be renewable beyond a one-year period.
Describing the removal of the Affordable Care Act’s (ACA) regulatory burdens as a victory for Americans seeking healthcare alternatives, Health and Human Services (HHS) Secretary Alex Azar said:
“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.”
Short-term health insurance typically offer less coverage and offers annual limits on coverage. Additionally, short-term plans are not required to cover individuals with preexisting conditions and often charge higher premiums on individuals with preexisting conditions.
In easing Obamacare rules, so-called “skinny” plans are no longer subject to the ACA-mandated 10 “essential health benefits,” for insurance, which covers the costs of prescription drugs, mental health services, hospitalization and maternity care. The new rules state consumers seeking less coverage be notified of the reductions in benefits.
HHS estimates the new rules would cost individuals covered under a short-term plan approximately $125 monthly, as opposed to Obamacare’s $400 monthly bill, but do not include the 2018 individual cost-sharing limit of $7,350 mandated by the ACA.
Critics of the new plan charge the easing regulations could inspire those covered by the ACA to seek inexpensive healthcare plans elsewhere and disrupt Obamacare exchanges through a surge in premiums resulting in further destabilization “of the individual insurance market,” according to investment research analyst Michael Newshel.
Cost increases provoked by departures from Obamacare exchanges could reach $168 million annually, paid for mostly by those with pre-existing conditions — a concern cited by Washington-based advocacy group, America’s Health Insurance Plans, and some Democratic lawmakers.
“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 Sen. Ron Wyden (D-Ore.).
Despite such a pessimistic outlook from some liberals and groups which support the ACA, Centers for Medicare and Medicaid Services administrator Seema Verma, dismissed such concerns and said relatively few would enroll in short-term plans.
Predicting up to 200,000 Americans would seek skinny insurance, Verma said: “The shift will have virtually no impact on individual market premiums.”
In 2016, an estimated 160,600 were enrolled in short-term health insurance plans.
[The Hill] [CNNMoney] [AARP] [Reuters] [Photo courtesy Flickr/Thomas Hawk]