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Trump administration proposes alternatives to ACA policies

  • President Donald Trump speaks during the Public Safety Medal of Valor awards ceremony in the East Room of the White House on Tuesday in Washington. The proposed rule said short-term plans could add more choices to the market at lower cost and may offer broader provider networks than Affordable Care Act plans in rural areas. AP PHOTO



Kaiser Health News
Tuesday, February 20, 2018

Insurers will again be able to sell short-term health insurance good for up to 12 months under a proposed rule released Tuesday by the Trump administration that could further roil the marketplace.

“We want to open up affordable alternatives to unaffordable Affordable Care Act policies,” said Health and Human Sservices Secretary Alex Azar. “This is one step in the direction of providing Americans health insurance options that are more affordable and more suitable to individual and family circumstances.”

The proposed rule said short-term plans could add more choices to the market at lower cost and may offer broader provider networks than Affordable Care Act plans in rural areas.

But most short-term coverage requires answering a string of medical questions, and insurers can reject applicants with preexisting medical problems, which ACA plans cannot do. As a result, the proposed rule also noted that some people who switch to them from ACA coverage may see “reduced access to some services,” and “increased out of pocket costs, possibly leading to financial hardship.”

The directive follows an executive order issued in October to roll back restrictions put in place during the Obama administration that limited these plans to three months. The rule comes on the heels of Congress’ approval of tax legislation that in 2019 will end the penalty for people who opt not to carry insurance coverage.

The administration also issued separate regulations Jan. 4 that would make it easier to form ” association health plans,” which are offered to small businesses through membership organizations.

Together, the proposed regulations and the elimination of the so-called individual mandate by Congress could further undermine the Affordable Care Act marketplace, critics say.

Seema Verma, who now heads the Centers for Medicare & Medicaid Services, which oversees the marketplaces, told reporters Tuesday that federal officials believe that between 100,000 and 200,000 “healthy people” now buying insurance through those federal exchanges would switch to the short-term plans, as well as others who are now uninsured.

The new rule is expected to entice younger and healthier people from the general insurance pool by allowing a range of lower-cost options that don’t include all the benefits required by the federal law — including plans that can reject people with preexisting medical conditions. Most short-term coverage excludes benefits for maternity care, preventive care, mental health services or substance abuse treatment.

“It’s deeply concerning to me, considering the tragedy in Florida and national opioid crisis, that the administration would be encouraging the sale of policies that don’t have to cover mental health and substance abuse,” said Kevin Lucia, a research professor and project director at Georgetown University’s Health Policy Institute.

Over time, those remaining in ACA plans will increasingly be those who qualify for premium tax credit subsidies and the sick, who can’t get an alternative like a short-term plan, predicts Lucia and other experts. That, in turn, would drive up ACA premiums further.

“If consumers think Obamacare premiums are high today, wait until people flood into these short-term and association health plans,” said industry consultant Robert Laszewski. “The Trump administration will bring rates down substantially for healthy people, but woe unto those who get a condition and have to go back into Obamacare.”