Trump Administration Wants to Allow Short-Term Insurance Plans, with Fewer Benefits

Posted on Friday, February 23, 2018 5:56 PM

The Trump Administration wants to allow insurance companies to offer plans with fewer health benefits and can also reject customers with preexisting conditions.   

Alex Azar, Health and Human Services Secretary, says that the plans, which do not meet the legal requirements of the Affordable Care Act, will allow uninsured Americans to access cheaper plans.  “It’s one step in the direction of providing Americans with health insurance options that are both more affordable and more suited to individual and family circumstances,” Azar said in a conference call with reporters Tuesday.  The plans are meant to offer people limited health insurance coverage during times where they find themselves uninsured, such as job transitions. 

These short-term plans don’t have to include the minimum essential health benefits – such as mental health care or prescription coverage – that have to be included in an ACA-compliant policy. Insurance carriers can also refuse coverage to those with pre-existing conditions and charge more if they’re likely to need more care.

Seema Verma, the administrator of the Centers for Medicare and Medicaid Services (CMS), says she expects between 100,000 and 200,000 people to drop their ACA-compliance coverage in exchange for stripped down, short-term plans. In addition, she says she expects millions on uninsured Americans will opt to buy a short-term policy to get minimum coverage.

Two concerns with the proposal:

1. Healthy individuals will purchase the cheaper plans and ACA-compliant plans will be left to cover a sicker pool of individuals, with higher premiums.

2. The inexpensive plans could potentially have inadequate coverage for unexpected health care events.

The proposed rule is open for public comment for the next 60 days.

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