Rule set to expand ‘short-term’ care

President Donald Trump’s administration issued a final rule Wednesday that clears the way for the sale of many more health insurance policies that do not comply with the Patient Protection and Affordable Care Act.

Trump has said he believes that the new “shortterm, 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 would not have to cover prescription drugs, maternity care or people with pre-existing conditions.

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 because insurers do not have to cover pre-existing conditions or the people who have them.

“For many who’ve got preexisting conditions or who have other health worries, the Obamacare plans might be right for them,” Health and Human Services Secretary Alex Azar acknowledged on

Fox and Friends. “We’re just providing more options.”

Under the current rule, issued in late 2016 by President Barack Obama’s 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.

The new rule takes effect in about two months. The new insurance 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,

and some states have indicated that they intend to do so.

The new options will help people struggling to afford coverage under the 2010 health care law, said James Parker, a senior adviser to Azar. 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.”

The new rule is presented as a redefinition of “short-term, limited-duration insurance.” But it stretches the common

understanding of those terms, and some of the new policies could be an attractive option for healthier consumers who now pay high prices for major medical coverage and are willing to take more risk in return for lower prices.

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 insurance policies next year, with enrollment increasing to 1.6 million by 2022.

About 161,000 people were covered by short-term health insurance plans at the end of 2016, according to data from state regulators.

About 20 million have coverage under the Affordable Care Act, combining its Medicaid expansion and subsidized private insurance for those who qualify.

Short-term coverage for an individual cost approximately $124 a month in late 2016, compared with about $400 a month for plans under the Affordable Care Act, according to the Centers for Medicare and Medicaid Services.

The agency’s chief actuary, Paul Spitalnic, has estimated that average 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 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.

Trump administration officials said they would require insurers to tell consumers exactly what is and what is not

covered under the new policies.

For some people, though, the cheaper premiums can come at a cost, such as when insurers claim that a cancer treatment shouldn’t be covered because a patient had the disease before buying coverage. The plans are effectively banned in New York, New Jersey and Massachusetts, and several other states impose restrictions on them.

State regulators told the administration that they’ve received complaints from consumers about the plans failing to cover their treatments. Pennsylvania’s insurance regulator said some consumers complained about services that weren’t covered, based on fine print in plan policies.

“There are many lawsuits and consumer complaints around the country stemming from unpaid bills” resulting from the short-term plans, Richard Besser, president of the Robert Wood Johnson Foundation, the biggest U.S. health philanthropy, said in a letter to the agency opposing the expansion of the plans.