During Health and Human Services Secretary Alex Azar’s confirmation hearings a few months ago, Donald Trump’s cabinet choice told senators he hadn’t seen “any effort to sabotage” the Affordable Care Act.
Given just how far the Trump administration has been willing to go to undermine the existing health care system, I can only assume Azar hasn’t been looking very hard. The trouble is, the efforts are still very much underway.
The Trump administration announced Tuesday that it is moving to expand the use of low-budget temporary insurance, which could offer customers a cut-rate alternative to plans on the Affordable Care Act’s exchange, but undermine more comprehensive insurance for others.
The proposed rule, which stems from an executive order by President Donald Trump, would allow people to buy short-term plans for up to a year instead of just the three months previously allowed. Unlike the ACA’s plans, they are not required to cover pre-existing conditions, cover specific treatments, or provide unlimited benefits.
At face value, this may seem unimportant. If some consumers want to buy cheap, bad insurance for their primary coverage for a year, that shouldn’t have much of an effect on everyone else, right?
Wrong. Anything that encourages younger and healthier people to move toward lower-cost, lower-coverage plans – largely because they’re less concerned about their health – creates an alternative market, leaving everyone else with the better-but-more-expensive coverage offered through ACA-approved plans. (As Jonathan Cohn reminds us, short-term plans “are generally not available to people with pre-existing conditions.”)
And once more young and healthy consumers exit the marketplace for these other plans, it raises costs because insurers have to pay more for older and less-healthy consumers. This isn’t speculative: insurers have already told federal officials this will happen.
The change comes on the heels of Trump scrapping cost-sharing reductions, which undermined the existing health care system, and Republicans repealing the individual mandate, which further undermined the system. Both moves are expected to further increase premiums.
Whether that’s a feature or a bug of the White House’s plans is a subject of some debate.