The Trump administration on Tuesday proposed to make available short-term health plans that don’t cover preexisting conditions, in yet another effort to undermine the Affordable Care Act.
Trump previewed the move in October, when he signed an executive order allowing the development of such plans.
Under Obamacare, short-term coverage can last up to three months, and is meant to be a bridge between jobs or school and work. But the new rule would expand that range to 364 days, and Seema Verma, the administrator of the Centers for Medicare and Medicaid Services, said that the administration is considering the possibility that customers could renew their coverage for longer.
The Affordable Care Act banned these kinds of bare-bones plans, which were widely available in the pre-Obamacare era, because they lack many of the protections mandated by the law. Beyond preexisting conditions, they also don’t have to provide what are known as “essential health benefits,” which include maternity care and addiction treatment.
Because of their skimpiness, the plans tend to be cheaper than the cheapest offerings in the Obamacare individual marketplaces. The administration framed its decision as a win for consumers.
“Americans need more choices in health insurance so they can find coverage that meets their needs,” Alex Azar, the secretary of Health and Human Services, said. “The status quo is failing too many Americans who face skyrocketing costs and fewer and fewer choices.”
But, as HuffPost’s Jonathan Cohn lays out, the new regulation is likely bad news for both consumers and the health-care system at large.
Freed from the shackles of a lightly regulated health-care system, insurers can get away with charging huge fees to often-unwitting consumers, leaving them saddled with onerous medical debt.
And because only healthy people would consider buying the plans, the already fragile Obamacare markets, which rely on a delicate balance of customers, are likely to suffer.
“The end result will be higher premiums and fewer plan choices for people with health care needs, as well as for healthy people who want the kind of benefits and financial protection that real insurance is supposed to provide,” Sabrina Corlette, research professor at Georgetown University’s Center on Health Insurance Reforms, told HuffPost.
The rule is just the latest Trump-administration broadside against Obamacare, which has endured despite fierce GOP efforts to repeal it last year.
Trump has cut off payments to insurers in an effort to pressure them out of the marketplace, a move that helped destabilize the marketplaces, but perversely made some people’s health care cheaper. It has allowed states to force citizens to work in order to become eligible for Medicaid, a requirement the Obama administration opposed. At least one state is trying to see if it can get away with ignoring the law altogether. And the GOP did manage to repeal the individual mandate — effective as of 2019 — as part of its tax cuts.
Still, the core of the law has survived, and continued Republican efforts to destroy it have done what President Obama never could: make it popular.
The new rule will not be official until after a 60-day commenting period, and as with most tweaks to the Affordable Care Act, it is likely to face lawsuits. Given that the new rules directly contravene existing law, those challenges may have a decent chance of success.
