Limited insurance plans are cleared
Critics argue plans don’t cover enough, only help insurers
The Trump administration clears the way for the sale of “short-term, limited-duration” health insurance policies that do not have to cover prescription drugs, maternity care or people with pre-existing conditions.
The Trump administration issued a final rule on Wednesday that clears the way for the sale of many more health insurance policies that do not comply with the Affordable Care Act and do not have to cover prescription drugs, maternity care or people with pre-existing conditions.
President Donald Trump has said that he believes that the new “short-term, limited duration insurance” could help millions of people who do not want or need comprehensive health insurance providing the full range of benefits required by the health law.
The new plans will provide “much less expensive health care at a much lower price,” Trump said. The prices may be lower because the benefits will be fewer, and insurers do not have to cover pre-existing conditions or the people who have them.
Under the current rule, issued in late 2016 by the Obama administration, short-term insurance cannot last for more than three months, as it was meant to be a stopgap. Under the new rule, the limit would be 364 days, and insurers would be allowed, but not required, to extend policies. The maximum duration, including any extensions, would be 36 months.
Much smaller premiums
The new options will help people struggling to afford coverage under the 2010 law, said James Parker, a senior adviser to Alex Azar, secretary of Health and Human Services. But Parker added: “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.”
Democrats deride the new health plans as “junk insurance” and say consumers will discover the limits of such plans when they become sick.
Randy Pate, a senior official at the Centers for Medicare and Medicaid Services, said the Trump administration expects 600,000 people to buy the new insurance policies next year, with enrollment increasing to 1.6 million by 2022.
The agency’s chief actuary, Paul Spitalnic, has estimated that premiums for short-term policies would be about half of the average premium for coverage sold in insurance exchanges under the Affordable Care Act, roughly $340 against $620 next year.
Consumer advocates, doctors, hospitals and some insurance companies expressed deep concern about the new plans, saying they would not adequately protect people who develop serious illnesses and could further destabilize insurance markets by drawing away healthy people.
People who buy the new policies and develop cancer could “face astronomical costs” and “may be forced to forgo treatment entirely because of costs,” said Chris Hansen, the president of the American Cancer Society Cancer Action Network.
Stung by such criticism, Trump administration officials said they would require insurers to tell consumers exactly what is covered under the new policies.
“There are individuals today who have been priced out of coverage” because of the Affordable Care Act, Parker said. “Until we have a more comprehensive replacement for the Affordable Care Act and Obamacare, we are looking to do everything we can to take incremental steps that will make insurance coverage of any type more affordable to those who today cannot afford insurance coverage.”
Takes effect in 2 months
The new rule takes effect in about two months. The new policies, which will be subject to state regulation, could be on sale before the end of the year. States can restrict their sale or require specific benefits.
Some insurers that lost money in the Affordable Care Act marketplace see the new short-term plans as a potentially lucrative opportunity.
The UnitedHealth Group has largely withdrawn from the Affordable Care Act marketplace but is actively selling short-term medical plans through its Golden Rule Insurance Co.