If you thought the Trump administration couldn’t take any additional steps to undermine the Affordable Care Act, think again.
The Trump administration is clearing the way for insurers to sell short-term health plans as a bargain alternative to pricey Obama-law policies for people struggling with high premiums.
But the policies don’t have to cover existing medical conditions and offer limited benefits. It’s not certain if that’s going to translate into broad consumer appeal among people who need an individual policy.
Health and Human Services Secretary Alex Azar told Fox News this morning, “For many who’ve got pre-existing conditions or who have other health worries, the Obamacare plans might be right for them. We’re just providing more options.”
Well, sort of. Short-term plans already existed under the Affordable Care Act, but they only last a few months, and they’re designed to serve as stopgap coverage. The Trump administration is changing the rules, opening the door to insurers offering “short-term” plans that cover 364 days, with the option of two annual renewals.
As Jonathan Cohn explained, “As a result, consumers in some cases could buy and then hold on to these plans for what basically amounts to three years, making it much easier to use ‘short-term’ policies as a substitute for the kind of comprehensive coverage available through the Affordable Care Act.”
For some consumers, this may seem like a good deal. After all, these plans will make it possible for people to buy much cheaper insurance. But there are a few serious problems that the administration is less eager to talk about.
First, these plans will be pretty awful. We’re talking about skimpy coverage that will leave Americans with huge medical bills in the event of a serious illness. That’s because the safeguards and consumer protections at the heart of “Obamacare” won’t apply to these plans.
Second, those with pre-existing conditions generally won’t even be able to get these plans. If there’s anything close to an American consensus in the health care debate, it’s protecting people with pre-existing conditions, and this approach doesn’t.
And third, Azar made it sound as if giving people “options” is an inherent good, but let’s not lose sight of the impact on the overall health care system.
If some consumers want to buy cheap, bad insurance for their primary coverage for a year (or three), the effects on everyone else are real. As we discussed when this was first proposed, 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.
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.
It’s why this looks so much like sabotage: administration officials are taking deliberate steps that they know will destabilize the national marketplace.
And if that sounds familiar, it’s because Trump and his team have made all kinds of related moves that appear designed to undermine the existing American system.
The Blue Cross/Blue Shield Association said this morning the administration’s latest gambit “has the potential to harm patients.” If the White House is concerned about such an outcome, it has a funny way of showing it.