Trump administration makes it easier to buy alternative to Obamacare

The Trump administration took another whack at the Affordable Care Act on Wednesday.Officials unveiled a final...

Posted: Aug 1, 2018 1:50 PM
Updated: Aug 1, 2018 1:50 PM

The Trump administration took another whack at the Affordable Care Act on Wednesday.

Officials unveiled a final rule that will make it easier to obtain coverage through short-term health insurance plans, which don't have to adhere to the law's consumer protections.

The move would reverse an Obama administration decision to limit the duration of short-term plans to no more than 90 days in order to make them less attractive. Insurers will soon be allowed to sell these policies for just under a year. They can be renewed for up to 36 months, though that renewal isn't guaranteed.

Administration officials say the short-term plans will provide a cheaper health insurance alternative for those who can't afford to buy coverage on the Obamacare exchanges.

"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.

But patient advocates and health policy experts argue that these policies provide only skimpy coverage and will undermine the Affordable Care Act. Other actions the administration has taken this year include making it easier for small businesses to band together to buy coverage and slashing support for a program that helps people sign up for Obamacare.

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.

The plans, which have been available for years and were originally designed to fill a temporary gap in coverage, will likely be cheaper than Obamacare policies. 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.

Have you ever had a short-term insurance policy? What was your experience? Tell us about it here.

Also, short-term plans don't have to offer comprehensive coverage. Typically, they don't provide free preventative care or maternity, prescription drugs and mental health benefits.

They can also impose annual or lifetime limits, meaning they may only pay out a set amount -- often $1 million or less -- leaving the policyholder on the hook for the rest. And, unlike Obamacare policies, they don't have to cap consumers' cost-sharing burden at $7,350 for 2018.

Young and healthy folks may like these plans because they come with lower monthly premiums. The cheapest short-term policy can cost only 20% of the least expensive Obamacare bronze plan in an area, according to the Kaiser Family Foundation.

But those who actually need care could find themselves having to pay more out of pocket for treatment and medications. In fact, some consumers with these plans have complained that they've been hit with unexpected expenses.

Loosening Obamacare's rules protecting those with pre-existing conditions also risks a backlash from the public since these protections are among the health reform law's most popular provisions. 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 nearly that many feel the same way about banning insurers from charging sick people higher rates.

The administration's short-term plan proposal was widely criticized by patient advocacy and hospital industry groups, saying it could leave people without coverage when they get sick. The two major insurance industry associations also expressed concerns about expanding the availability of these plans. In April comments to the Centers for Medicare & Medicaid Services, the insurer groups said that doing so could destabilize the individual market and cause premiums to rise for those who want comprehensive coverage.

"Congress, the Administration, and the states should work to stabilize the individual market -- not simply create a parallel market that works only for healthy people," wrote the Blue Cross Blue Shield Association, a national federation of 36 independent Blue Cross and Blue Shield Plans.

Administration officials said that the plans will contain notices urging consumers to read their policies carefully so they are aware of any exclusions or limitations regarding coverage of pre-existing conditions or health benefits, such as hospitalization, preventative care or prescription drugs. 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.

"These policies are different from those offered on the exchange," said James Parker, senior advisor to Health Secretary Alex Azar. "We make no representation that it's equivalent coverage. These policies will not necessarily cover the same benefits or extend coverage to the same degree."

Short-term plans are also very profitable for insurers -- more than one-third of the premiums people pay goes toward overhead and profit instead of paying for policyholders' health care, according to data from the National Association of Insurance Commissioners. Insurers in the individual market aren't allowed to spend more than 20% on these expenses.

The Trump administration estimates that 200,000 Obamacare enrollees will move to short-term plans next year. Also, 300,000 people who now buy individual market polices outside of the Obamacare exchanges will switch to short-term plans and another 100,000 uninsured folks will purchase them next year. By 2021, enrollment in the individual market will decrease by 1.4 million.

But other projections run far higher -- the Urban Institute predicts 2.2 million fewer people will enroll in Affordable Care Act-compliant plans when short-term plans become more widely available.

The administration expects premiums for Obamacare plans to increase by 1% next year and by 5% in 2021 because of the shifts.

The new rule stems from an executive order President Donald Trump signed in October aimed at boosting competition, giving consumers more choices and lowering premiums.

That order also spurred the administration to issue a final rule last month aimed at making health insurance cheaper for some small employers. 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.

However, these plans also don't have to adhere to all of Obamacare's rules, particularly the one requiring insurers to offer comprehensive coverage. 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. Also, the offerings could be less attractive to young women if they don't cover maternity benefits.

Mississippi Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 93556

Reported Deaths: 2810
CountyConfirmedDeaths
Hinds6974155
DeSoto541155
Harrison373272
Jackson338867
Madison320886
Rankin319075
Lee260667
Jones242078
Forrest239070
Washington217971
Lafayette208439
Lauderdale1999124
Bolivar179465
Oktibbeha175050
Lamar163134
Neshoba1536103
Panola144027
Sunflower141744
Lowndes139957
Warren138150
Leflore136980
Pontotoc123416
Pike121248
Monroe118865
Scott116425
Copiah116233
Coahoma112327
Holmes109258
Marshall107615
Lincoln106753
Grenada106135
Yazoo103829
Simpson101143
Union97824
Tate95137
Leake93937
Adams91936
Wayne87721
Pearl River86550
Marion84133
Prentiss81117
Covington80522
Alcorn77311
Itawamba76221
Newton75723
Tallahatchie75418
George74913
Winston72419
Tishomingo65837
Chickasaw65524
Tippah64216
Attala64125
Walthall59325
Clay57817
Hancock56121
Jasper55415
Noxubee54315
Clarke53539
Smith52314
Calhoun50612
Tunica47913
Montgomery45520
Claiborne45216
Lawrence42512
Yalobusha41714
Perry40718
Quitman3745
Humphreys37315
Stone35511
Greene34517
Webster33113
Jefferson Davis32511
Carroll31212
Amite31110
Wilkinson30217
Kemper28615
Sharkey26312
Jefferson2429
Benton2191
Franklin1893
Choctaw1795
Issaquena1033
Unassigned00

Alabama Coronavirus Cases

Confirmed Cases: 131405

Reported Deaths: 2292
CountyConfirmedDeaths
Jefferson19015337
Mobile13066289
Montgomery8674173
Madison758375
Tuscaloosa7240114
Lee571359
Shelby568450
Baldwin506149
Marshall383543
Etowah335547
Calhoun333839
Morgan319726
Houston270822
Elmore254947
DeKalb235519
St. Clair223435
Walker222680
Talladega206926
Limestone199519
Cullman184517
Dallas174826
Franklin174328
Russell17132
Autauga169024
Lauderdale164633
Colbert160626
Escambia156225
Blount155114
Jackson150611
Chilton148527
Dale133043
Covington130927
Coffee12778
Pike11559
Tallapoosa113683
Chambers113042
Clarke104917
Marion94228
Butler90938
Barbour8357
Winston70912
Marengo69919
Lowndes64827
Pickens63514
Bibb63210
Hale61528
Randolph60812
Bullock58714
Lawrence58520
Monroe5758
Geneva5724
Cherokee56516
Washington54613
Clay5427
Perry5376
Wilcox53111
Conecuh52311
Crenshaw52331
Macon47720
Henry4724
Fayette4219
Sumter41819
Lamar3462
Choctaw34512
Cleburne3236
Greene30015
Coosa1643
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