USA to extend skimpy health insurance outside of Obamacare

USA to extend skimpy health insurance outside of Obamacare

"The Trump Administration wants to let insurance companies sell skimpy plans to unwitting Americans and then leave them holding the bill if they get sick or hurt". "These high-value, short-term insurance products are designed for people who find Obamacare plans too expensive, or who find themselves between jobs".

"The status quo is failing too many Americans who face skyrocketing costs and fewer and fewer choices", Health and Human Services Secretary Alex Azar said.

The Administration said its goal is to give people more insurance options at a time when premiums have been rising.

The administration's proposal would expand consumer access to more affordable coverage-short-term, limited duration health insurance plans-as a direct alternative to Obamacare plans offered on the Affordable Care Act (ACA) exchanges.

Obamacare now allows for such short-duration plans, but they are limited to three months.

The proposed rule builds on an executive order the president issued a year ago. Short-term policies may impose limits on the amount the insurer will pay, but they do not have to cap the patient's out-of-pocket costs. These short-term plans are cheaper because they do not have to cover pre-existing conditions or cover Obamacare's "essential health benefits". They may, for example, omit coverage of maternity care, mental health care or addiction treatment. The Trump administration would reverse that rule, once again allowing people to buy this non-Obamacare coverage for nearly an entire year.

Verma said Tuesday that her department's independent actuaries predict that just 100,000 to 200,000 people will shift from the ACA individual market to these short-term plans, and insisted that shift will not significantly impact premiums for the people who remain because they need comprehensive insurance.


HHS estimated that a short-term plan costs about $125 per month in late 2016 versus almost $400 for an Obamacare plan before any federal tax credits were applied - though most customers on the ACA markets qualify for subsidies.

The trade group America's Health Insurance Plans (AHIP) said it was still reviewing the proposal, but spokeswoman Kristine Grow said members "remain concerned that expanded use of short-term policies could further fragment the individual market, which would lead to higher premiums for many consumers, particularly those with pre-existing conditions".

"There are healthy people sitting on the sidelines without coverage", Verma said.

CMS administrator Seema Verma said the administration was seeking input on whether to allow the policies to be renewed as part of the comment period that will follow the release of the proposed regulations.

Republicans in Congress have already repealed the individual mandate, which had previously been a deterrent to short-term coverage - it wasn't considered compliant with the mandate, so people who bought short-term insurance also had to pay the mandate penalty.

Democrats say the solution is to increase government subsidies, so that more middle-class people will be eligible for taxpayer assistance to buy comprehensive coverage.

But that deterrent no longer exists, which could encourage more people to flee the Obamacare markets for short-term coverage.

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