Short-Term Insurance Plans Will Make American Healthcare Even Worse

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The Trump administration recently approved new health insurance rules that will help further cripple the already embattled Affordable Care Act. The rules regard so-called “short-term insurance,” plans that are meant to help people fill a gap in coverage, but aren’t intended to provide any serious medical care. The plans don’t cover mental health or prescriptions, and can refuse to insure people with preexisting conditions.

The plans were limited by President Obama under the ACA. According to those rules, the plans were only allowed to last three months and did not go towards fulfilling the individual mandate, meaning that anyone on a short-term plan still needed to pay a fine if they didn’t have additional coverage.

Now, Trump’s team has undone these regulations, according to HuffPost:

Under the new rules that HHS released last week, insurers can go back to selling short-term plans that last for (nearly) one year and, in a new twist, they’ll be able to let consumers renew those plans twice. If insurers decide to offer such policies, consumers could then hold “short-term” coverage for what basically works out to three years. They wouldn’t even have to worry about the individual mandate, because, thanks to the GOP tax bill that Trump signed late last year, the penalty falls to zero in 2019.


“What we are doing is bringing cheap and more affordable options to individuals who are trapped under the Affordable Care Act with insurance that is actually not affordable or not available or doesn’t deliver them hospitals and doctors that they need,” HHS Secretary Alex Azar said on Fox News last week.

Unsurprisingly, health insurance officials—the people who actually deal with this stuff every day—don’t agree. At the National Association of Insurance Commissioners meeting in Boston this weekend, many of the officials expressed concern over the new rules.

“I’m frustrated with how [administration officials] are presenting this,” Jessica Altman, the insurance commissioner for Pennsylvania, told HuffPost. “They’re saying, ‘Here’s this option that’s affordable and wonderful,’ and not talking about how limited the plans are.”

“I’m concerned that people will buy these policies, show up at the hospital for a condition they did not expect, and discover they are not covered,” Lori Wing-Heier, director of Alaska’s insurance division, told HuffPost.


The Trump administration says they are going to make sure people know what is covered by the plans. Their new rules require clear, prominently placed language telling consumers the difference between “short-term” policies and regular policies. “One of the things we are doing is requiring consumer protection notice on the plans,” Azar said in a briefing. “In fact, it’s a more robust notice than President Obama’s administration had on these very same plans to ensure the patient, the consumer, knows going in what they are getting and what they’re not getting through the plan.”

But officials say that’s not enough.

“They may read [the warning], but that’s not the same as understanding it,” Michael Conway, Colorado’s interim commissioner, warned, noting that many people will assume these plans are still subject to the Affordable Care Act’s rules. “Because of the ACA, now people think the baseline has changed ― that certain things are always covered.” [...]

Altman, from Pennsylvania, frequently cites a story about a woman who bought a short-term plan, had a stroke, and discovered belatedly that her $250,000 in hospital bills far exceed the $40,000 cap from her policy.

“You can look at one of these plans and you’ll see it covers doctors, hospitals, maybe even drugs, and so you think it will have everything I need,” Altman said. “You won’t realize that the amounts are caps, or have exclusions ― it’s really difficult to expect that consumers will be able to figure out what all of this means, and really know what they are getting.”


Ahhh, the famed “choice” in healthcare coverage Americans know and love.

Republicans tend to support the change, claiming that cheapo plans are better than nothing for the many people who still don’t have insurance. Most officials disagree.


“Of course [the plans will] be less expensive,” California Commissioner Dave Jones told HuffPost. “That’s because it’s junk insurance and it won’t cover the same things.”

Paying less for healthcare does sound nice. If only there was some way to pay less, and yet provide better coverage than Americans have today. If only dozens of other countries would model this for us. That would sure be nice.