Unaffordable coverage

This editorial appeared in the Baltimore Sun.

If there’s one thing about the Affordable Care Act that’s been consistently popular, it’s the prohibition on insurance companies denying coverage based on pre-existing conditions. The inability of those with the most dire health needs to get coverage of any kind was one of the great outrages of the pre-ACA health insurance system, and it is one that nearly everyone — up to and including President Donald Trump — claim they want to keep.

But the Trump administration’s latest revision to health care rules, issued last week, directly undermines that protection. Under the guise of providing consumers with greater choice and lower cost, the administration has loosened the rules for short-term insurance — policies meant as a stopgap that are exempt from most basic benefits requirements under the ACA, including that they cover pre-existing conditions.

Under the new rules, the policies will be allowed to last for up to a year (previously, the limit was three months), and consumers will be able to renew them, which makes them not so “short-term” at all. Health and Human Services Secretary Alex Azar went on Fox News to pitch this change as a boon to middle-class consumers who don’t qualify for ACA subsidies, saying, “They can provide a much more affordable option for millions of the forgotten men and women left out by the current system.”

The thing the happy talk about consumer choice leaves out is the extent to which one consumer’s choice affects another’s when it comes to health insurance. These short-term policies are likely to appeal mainly to younger, healthier patients who believe they are unlikely to need anything more than basic coverage. Most of them may well be right about that — at least for now. But the more of them who leave the broader insurance pool to take up these bare-bones policies, the older and sicker the population in full ACA policies will be.

The result will be ever-higher premiums as the costs of providing care for those with the most extensive health needs will be spread over fewer and fewer people. That phenomenon is called “adverse selection.”

Expanding short-term insurance, along with another step the administration recently took to expand other low-cost, low-benefit “association” plans, will make the problem worse.

The result is that those who need comprehensive health insurance today won’t be able to afford it.