Consumers getting more options for short-term health plans

Grant Boone
August 6, 2018

UnitedHealthGroup's Golden Rule Insurance, National General Insurance, IHC Group, American National Life and some regional Blue Cross and Blue Shield plans sell short-term insurance; Aetna is considering entering the market.

Aetna, headquartered in Hartford, was more supportive of the administration's plan. The notices will say that these plans are not required to comply with Affordable Care Act requirements for health insurance and do not meet Obamacare's minimum essential coverage requirements, meaning policyholders may not be able to switch to a plan on the exchange outside of Obamacare's open enrollment period.

"We make no representation that it's equivalent coverage", said Jim Parker, a senior adviser at HHS.

Proponents of short-term plans say they provide a fallback option for healthy people who make too much money to get subsidized coverage under Obama's health law. But that's because they are allowed to exclude those with pre-existing conditions and base rates on an applicant's medical history, unlike Obamacare plans.

These plans allow people to insure against the risk of catastrophic illnesses, the kinds that can bring financial ruin to a formerly healthy person, without all the bells and whistles-you won't have to insure for services you are unlikely to use.

The Trump administration on Wednesday unveiled a final rule that will soon allow consumers to purchase less-robust, short-term health insurance plans that typically cost less than Affordable Care Act (ACA) plans.

The Trump administration's approach is expected to please brokers and the insurers that offer the coverage.

"Do we just take some junk plan and put up with that?" Chris Murphy, D-Conn. "That's simply not health insurance".

The new rules go into effect in 60 days, so expanded short-term policies could be available in October.

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.

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The nonpartisan Congressional Budget Office estimates that roughly 6 million more people will eventually enrol in either an association plan or a short-term plan. That means a consumer could be covered under a "short-term" plan for up to three years.

Pennsylvania's insurance regulator said some consumers complained about services that weren't covered, based on fine print in plan policies.

"If you get cancer, your plan will not cover oncology drugs, which can cost an average of $10,000 a month" and "if you are pregnant, you will have to find another way to pay for the cost", averaging about $32,000 for prenatal care and delivery, the center said in a recent post.

It's unclear how that might happen, since versions of such plans have always been available - including during the Obama administration.

Senate Minority Leader Chuck Schumer of NY says Democrats will "do everything in our power" to stop the Trump administration's expansion of short-term health insurance plans. According to a report by the National Association of Insurance Commissioners, the policies paid out an average 55 percent of their premiums in actual health care a year ago. Since the Republican-led Congress was unable to repeal large parts of the statute previous year, the administration has ended a significant subsidy for ACA insurers and slashed federal spending on advertising and in-person help to encourage consumers to sign up through insurance marketplaces created by the law. The tax bill approved past year by Congress stops this financial penalty as of 2019. These plans would likely have lower premiums, but they would also provide fewer benefits - which could leave sicker and older workers out in the cold. Under the Obama administration, such plans were limited to three months' duration.

HHS officials said current law allows the plans to have this longer shelf life, although critics are likely to argue that - when you factor in the renewal option - a plan that lasts three years can not be considered short-term.

Such health plans have long existed, and their idea was to provide temporary coverage for people who are between jobs or have other brief need for low-priced insurance. The CMS projected that 600,000 people will buy the skinny coverage next year. "But, the premiums for those plans will rise as short-term plans cherry pick healthy people". The plans have limits on coverage. Ever since failing to totally repeal Obamacare, the Trump administration along with Republicans have taken steps to make it increasingly hard for the Affordable Care Act to function and to be affordable.

Four cities on Thursday sued President TrumpDonald John TrumpPro-Trump pastor: Trump is "the most pro-black" president I've ever seen Trump renews calls for interview with Mueller: report CNN's Acosta: Hannity is "injecting poison into the nation's political bloodstream" MORE, arguing that he is violating his constitutional duty to enforce the law by "sabotaging" ObamaCare.

In early June, the Department of Justice said it would not defend the law against the Texas case, which is on appeal and may eventually end up at the Supreme Court.

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