Today, the Trump administration proposed new rules for short-term insurance plans. It’s a move that would allow insurance companies to offer shoddy, cryptic coverage, for years at a time, to populations desperate for cheap options. It would also, of course, simultaneously weaken the Affordable Care Act market.
The proposed rule, which is entering a period of public comment for 60 days, would roll back Obama-era restrictions on companies selling limited-duration insurance plans, allowing them to offer coverage plans for up to 364 days. Such plans, which often do not cover broadly defined pre-existing conditions, maternity care, prescription drugs, or treatment for mental health issues, have been referred to as “junk insurance” and compared to predatory payday loans, offering contracts with little regulatory oversight that offer low premiums in exchange for astronomical surprise bills in the case of, say, an actual health issue.
Short-term policies are also permitted to turn down patients or charge them higher premiums based on their gender, age, and other factors, as well as refuse to cover preventive care, according to the Kaiser Foundation.
Under the Obama rules, insurance companies could only offer such plans as stop-gap measures, for a period of up to 90 days—a move intended to discourage consumers from using the cheaper (but far less regulated) plans instead of signing up for Affordable Care Act plans.
But this is the insurance business, so providers have already begun the process of exploiting loopholes to profit from the anguish of being uninsured in America. In anticipation of the Trump administration’s bid today to weaken the Obamacare market, major insurance providers like Golden Rule and National General have already begun opportunistically selling back-to-back 90-day short-term insurance plans. These are plans that can arbitrarily stick patients with medical bills for any condition they develop after they enroll, and which can carry hidden risks and high out-of-pocket costs in the fine print.
In defending today’s proposal, Heath and Human Services secretary Alex Azar referred to the “forgotten men and women” who remain uninsured today, and promised the expansion of the short-term insurance market would “deliver affordable options” to the 28 million uninsured people in America.
Perhaps Azar should have spoken to some other forgotten men and women—like Ruth Dunlap, who worried her (very common) gall bladder removal might be considered a preexisting condition and cost her thousands of dollars out-of-pocket, or anyone who purchased short-term insurance when they were ostensibly healthy and then became suddenly very sick.