Insurers warn on Trump’s short-term health plans

  • Insurers warn on Trump’s short-term health plans

Insurers warn on Trump’s short-term health plans

In a press release, U.S. Health and Human Services Secretary Alex Azar says, "These plans aren't for everyone, but they can provide a much more affordable option for millions of the forgotten men and women left out by the current system".

But the plans could also raise premiums for those who remain in the Affordable Care Act marketplace - and the short-term coverage is far more limited.

"These policies are different from those offered on the exchange", said James Parker, a senior adviser for health reform at HHS, in a conference call with reporters.

The Trump administration's approach is expected to please brokers and the insurers that offer the coverage.

The fight to preserve the Affordable Care Act has heated up. The IHC Group is an organization of insurance carriers headquartered in Stamford, Conn.

The new rules go into effect in 60 days, so expanded short-term policies could be available in October.

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 law extended health insurance to some 20 million Americans. 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.

"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.

Unable to repeal much of the Obama-era law, Trump's administration has tried to undercut how it's supposed to work and to create options for people who don't qualify for ACA subsidies based on their income. Next year, there will be no tax penalty for someone who opts for short-term coverage versus a comprehensive plan, so more people might consider the option. That would likely drive up premiums for those on other plans.

It also noted that the administration previous year said it would halt so-called cost-sharing payments, which offset some out-of-pocket healthcare costs for low-income patients. "And of course if you have any kind of pre-existing condition, or you want to have a baby or you're expecting to have serious medical needs taken care of these are not the plans for you", she says. The tax bill approved past year by Congress stops this financial penalty as of 2019. Not a single short-term health plan studied covered maternity care whatsoever.

Officials say the plans can now last up to 12 months and be renewed for up to 36 months.

This is pure politics, It overlooks the nature of the plans: they are short-term plans, not for everybody (this is not the plan you would purchase if you have a pre-existing condition), and they fill a niche. The CMS projected that 600,000 people will buy the skinny coverage next year.

Adversaries of the plans are calling them "junk insurance".

And, for insurers, profit margins tend to be higher for short-term plans compared with ACA coverage. They can include dollar limits on coverage, and there's no guarantee of renewal. Also, insurers are not held to the ACA requirement that they spend at least 80 percent of premium revenue on plan members' medical care.

"The people who benefit most from this plan are self-employed or small business owners in the individual market that were hit the hardest by the skyrocketing premiums under Obamacare", said Haislmaier.

In early June, the Department of Justice said it would not defend the law against the Texas case, which is on appeal and may eventually end up at the Supreme Court.

A few, including California, are already considering tighter restrictions than what's spelled out in the federal directive. State insurance regulators also have jurisdiction, and many states may move to impose their own restrictions. Some states do not permit them.