Trump's short-term health plans are cheaper but cover less
05 August, 2018, 02:09 | Author: Denise Dawson
Consumers will have more options to buy cheaper, short-term health insurance under a new Trump administration rule, but there's no guarantee the plans will cover pre-existing conditions or provide benefits like coverage of prescription drugs.
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. "These policies will not necessarily cover the same benefits or extend coverage to the same degree".
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. Before, short-term plans could not last longer than three months.
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The HealthCare.gov website main page. 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.
The departments of Health and Human Services, Labor and Treasury announced new rules Wednesday that make it easier for consumers to replace ACA insurance with these short-term policies.
That same report expects premiums for ACA plans to increase 15 percent next year, in part because many consumers may be less likely to buy coverage without the threat of a tax penalty.
Short-term plans could roil the Obamacare market by drawing healthier consumers away from the exchanges and pushing up the premiums for those who remain.
Azar described the plans as being for people "in the gig economy, who are independent contractors who may not get employer insurance; for those individuals who may have three part-time jobs and not get employer insurance; for those people transitioning between jobs; for the kid who left school and is headed to a job, but doesn't have insurance; or for the folks in rural America where they may not have access to an affordable Obamacare plan". Three-quarters of respondents to a recent Kaiser Family Foundation poll said it is "very important" that Obamacare's rule prohibiting insurers from denying coverage due to a person's medical history remains law, while almost that many feel the same way about banning insurers from charging sick people higher rates.
"These new short-term plans are nothing short of junk insurance and are so unsafe for Americans that it's no wonder not a single group representing patients, physicians, nurses or hospitals has voiced support", Schumer said in a statement. State insurance regulators also have jurisdiction, and many states may move to impose their own restrictions.
A major insurer group expressed strong concerns.
Senate Democratic Leader Chuck Schumer of NY is vowing to do everything in his power to block the administration. It wasn't immediately clear how that might happen.
"These policies are different from those offered on the exchange", said James Parker, senior advisor to Health Secretary Alex Azar.
Short-term plans, if they appeal to many consumers, could also play a role.
"The insurance company will ask you a series of questions about your health", Moriello said.
Only 106,000 people were on short-term health plans at the end of 2016, according to the administration.
"It is not a silver bullet, but the rates are less", says Nolan, a Louisiana insurance broker. The move allows small businesses and the self-employed to join together based on their industry or location and purchase health insurance through association health plans.
"It's a way better alternative to not being insured", said Jeff Smedsrud of Pivot Health.
Smedsrud said most plans restrict coverage for those who have sought treatment for a pre-existing condition over the past five years.
"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.
The nonpartisan Congressional Budget Office estimates that roughly 6 million more people will eventually enroll in either an association plan or a short-term plan.
About 20 million are covered under the Obama law, combining its Medicaid expansion and subsidized private insurance for those who qualify. "But, the premiums for those plans will rise as short-term plans cherry pick healthy people".
But a recent Kaiser Foundation analysis found turmoil in the unsubsidized market.
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