Trump whacks Obamacare by boosting short-term health plans

The Trump administration has finalized rules making it easier to enroll in short-term insurance plans, another blow to Obamacare markets that increases access to cheaper, skinnier coverage that doesn’t adhere to the health care law’s standards. Critics deride short-term plans as “junk” insurance that won’t protect people with pre-existing conditions, and they argue the plans will undermine Obamacare’s fragile exchanges by siphoning off healthy customers. The Trump administration has prioritized expanding coverage options, arguing that the Affordable Care Act severely eroded choice for individuals shopping for insurance. In June, the Trump administration finalized rules making it easier for small businesses and independent contractors to band together to offer association health plans that aren’t subject to the ACA’s coverage mandates. The moves stem from an executive order signed by President Donald Trump in October — after congressional repeal efforts fell through — directing administration officials to overhaul regulations and allow more alternative offerings. “You’ll get such low prices for such great care,” Trump said at the signing of the executive order. “It should have been done a long time ago.” The new rules, which will be released Wednesday morning, are a reversal of the Obama administration’s efforts to limit short-term plans. The previous administration reduced the plans’ maximum length from one year to three months in the hope of steering more people into comprehensive Obamacare coverage. The Trump administration, in a vast expansion of the short-term plans, is restoring the previous 12-month enrollment limit and will allow people to renew the coverage for up to 36 months. Trump’s health department projects 600,000 will enroll in short-term plans next year, with that market eventually growing to 1.6 million people. The new rules will take affect in 60 days. Critics say short-term plans only offer an illusion of coverage, and enrollees often don’t realize how limited their benefits are until it’s too late. The plans are cheaper in part because insurers can refuse to cover people with pre-existing conditions and limit coverage of expensive services like mental health treatment. Short-term plans also typically cap coverage, so customers can still end up getting socked with expensive medical bills. “There’s a real worry that consumers will believe they’re buying comprehensive insurance that protects them financially from the unexpected, but then are left high and dry with medical bills,” said Sabrina Corlette, an insurance expert at Georgetown University and former Democratic Senate staffer. In 2017, insurers selling short-term plans plans spent an average of 65 percent of premium revenues on medical costs, according to the National Association of Insurance Commissioners. That’s far below the 80 percent threshold that Obamacare plans must spent on medical care and quality improvement. Trump administration officials say the expanded coverage options are needed, particularly for middle-income people who earn too much to qualify for Obamacare subsidies and can no longer afford coverage. The officials said the final rule strengthens short-term plans’ disclosure requirements and that state regulators can add consumer protections. “We do really want people to be able to fully read and understand what they’re buying,” said Randy Pate, director of the HHS Center for Consumer Information and Insurance Oversight, on a call with reporters. “We fully recognize these products are not necessarily for everyone." source: https://www.politico.com/story/2018/08/01/trump-obamacare-short-term-plans-689126 #Headlines by: pdemko@politico.com (Paul Demko)

Original Post: https://www.politico.com/story/2018/08/01/trump-obamacare-short-term-plans-689126