August 18, 2018

Trump agrees to let insurers sell cheaper health plans than ObamaCare

06 August 2018, 10:27 | Rodolfo Wallace

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Chicago, Columbus, Cincinnati and Baltimore are now suing the Trump administration over the move, accusing the president of "undermining the law". To get around the three-month limit, she purchased four plans to run back-to-back, a practice called stacking. But only the short-term plans can also charge higher prices to customers with medical conditions that require care, deny them coverage, or avoid covering health problems that a customer had before buying the insurance - all practices that the ACA bans.

By drawing younger or healthier consumers out of the ACA marketplace, the short-term plan expansion will add up to a 1.7 percent increase to premiums next year, according to the industry lobbying group America's Health Insurance Plans.

The final rule will take effect in 60 days, just before the new open enrollment period for the Affordable Care Act. Under the new rule, the 12-month plans can be renewed for up to 36 months. Still, the fact that people with pre-existing conditions - which could be anything from acne to cancer - can be discriminated against or not have bills related to the condition covered will likely cause many people with health problems to avoid the new plans.

Short-term plans are cheaper than ACA plans.

An HHS spokeswoman told NPR the department does not comment on pending litigation, but in an interview on Fox News on Thursday, Secretary Alex Azar asserted the insurance law "is still broken".

The plans don't have to comply with Affordable Care Act rules including: coverage of essential benefits; prohibition against medical underwriting; limits on premium variations based on age, sex or health status; elimination of annual and lifetime benefit caps; annual limits on out-of-pocket costs; and the requirement that plans spend no more than 20% of premiums on administrative costs and profit. This will make short-term health plans easier and more affordable for patients to access, HHS says.

"The broader availability and longer duration of slimmed-down policies that do not provide comprehensive coverage has the potential to harm consumers, both by making comprehensive coverage more expensive and by leaving some consumers unaware of the risks of these policies", said Senator Ron Wyden in a statement to Politico.

Aetna, headquartered in Hartford, was more supportive of the administration's plan.

People who don't get insurance through their jobs will now be able to buy short-term policies that may be cheaper than Affordable Care Act coverage.

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"Our hope is folks who are looking at short-term coverage instead of the ACA are doing so with their eyes open", said Sean Malia, senior director of carrier relations with eHealth, a private online insurance marketplace.

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. Under the rule, insurers are required to warn their customers that the policies may not cover pre-existing conditions and may offer limited benefits.

"Consumers should be assured that insurers will not deny claims for current medical care based exclusively on medical treatment received years earlier", Aetna said.

A major insurer group is warning that the Trump administration's short-term health insurance plans could be harmful for consumers.

"We fully recognize that these products are not necessarily for everyone, but we do think they will provide an affordable option to many, many people who've been priced out of the current market under the Obamacare regulations", said Randy Pate, a deputy administrator at the Centers for Medicare & Medicaid Services. Chris Murphy, D-Conn. "That's simply not health insurance. But with the number of uninsured people going up, our ability to recoup is hurt, and that's a direct result of President Trump trying to sabotage the ACA".

The report says that premiums would vary considerably depending on geography and types of plans, and the focus in on the nationwide average. Democrats want to prop up ObamaCare no matter the cost, but the goal of government policy should be to support a system that offers consumers the choice of coverage that best works for them.

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

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 affordable insurance.

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