U.S. to extend skimpy health insurance outside of Obamacare

Posted February 21, 2018

The Trump administration Tuesday spelled out a plan to lower the cost of health insurance: give consumers the option of buying less coverage in exchange for reduced premiums. Then they usually have to pay a deductible of several thousand dollars.

If they have an accident or fall ill, like break a leg or get a bad case of the flu, they will find these plans provide little or no coverage for the services they need, or the plan may even retroactively cancel their coverage at the very time they need it most.

"In the fourth quarter of 2016, a short-term, limited duration policy cost approximately $124 a month compared to $393 for an unsubsidized ACA-compliant plan", noted a fact sheet from the Centers for Medicare & Medicaid Services (CMS).

A government economic analysis that accompanied the proposal forecast a moderate increase in premiums among customers sticking with their ACA plans through HealthCare.gov.

"It's about options for some, maybe the individual market plans for making sense and for others maybe this will make sense", HHS Secretary Alex Azar said in an interview with WIS.

Following up on a directive the White House issued last October, the departments of Health and Human Services and the Treasury issued a proposed rule Tuesday that would ease restrictions on cheaper short-term, limited-duration coverage options.

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Obamacare now allows for such short-duration plans, but they are limited to three months.

"Specifically, we estimate that only 100,000 to 200,000 people will shift". Only a small percentage of people pay higher premiums without assistance.

"In 2008, one of the important policy motivators for what ultimately became the ACA was protecting people from so-called mini-med plans that provided coverage in name only", says Rodney Whitlock, a health care consultant with ML Strategies who worked as a Republican staffer on the Senate Finance Committee when the Affordable Care Act was written.

The effect could be much the same as the changes to association health plans, another lane the administration is opening up to allow people to buy insurance outside of the ACA: Healthier people would be the consumers most likely to use this escape hatch to find cheaper, if less comprehensive, coverage outside of Obamacare. Instead, they say they are trying to make things more workable for people who are not being helped by the health law.

Trump administration officials reject the notion that they're trying to undermine the ACA. They may, for example, omit coverage of maternity care, mental health care or addiction treatment. On top of that, they will not be able to enroll in a comprehensive plan offered in the marketplace until the next open enrollment period.

Consumer advocates say customers should read the fine print carefully to make sure the plan will cover their expected bills.

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Such plans could roil the Obamacare market, drawing healthier consumers away from the exchanges and pushing up the premiums for those who remain.

The administration will accept comments on the proposed rule for the next 60 days.

However, short-term coverage won't count as qualifying coverage under the Obama health law for 2018.

The new short-term plans offer pared-down benefits and do not have to abide by all Obamacare regulations.

However, neither she nor Azar would say how numerous 28 million people who are now uninsured would be expected to enroll in such plans.

The Trump administration is dismissive of claims that the new regulations would hurt Obamacare's markets.

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