Trump's short-term health plans are cheaper but cover less


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The Trump administration on Wednesday cleared 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.

The policies will be available for 12 months at a time, up from a current limit of three, and customers will be able to renew them for additional years.

U.S. Sen. Ron Wyden, D-Ore., was quick to react to final approval of the plans, saying they will hurt consumers: "By giving the green light to junk plans, Trump and his administration are once again siding with fraudsters, unscrupulous brokers and insurance companies over unsuspecting Americans that simply want affordable health care". These plans won't have to cover as many medical services and are exempt from covering people with pre-existing conditions.

The pair of new rules carries out an executive order President Trump signed in October, directing agencies to broaden access to these two small niches in the insurance market to promote "a health-care system that provides high-quality care at affordable prices for the American people".

Premiums are much cheaper than ACA plans, particularly for younger, healthier people-often 20% of the cost of the lowest-priced bronze plan on the local ACA exchange; they typically offer broader provider networks than ACA plans. 'We're just providing more options'.

In the months since the idea surfaced, it has elicited a wall of opposition from the health insurance industry, hospitals and patient advocacy groups. A short-term plan might cost $160 a month or even less.

Under the Trump administration's rule, these short-term plans will be renewable for up to three years.

Critics say the plans undermine the health law. Since the Republican-led Congress was unable to repeal large parts of the statute a year ago, the administration has ended a significant subsidy for ACA insurers and slashed federal spending on advertising and in-person help to encourage consumers to sign up through insurance marketplaces created by the law.

Short-term plans are also very profitable for insurers - more than one-third of the premiums people pay goes toward overhead and profit instead of paying for policyholders' health care, according to data from the National Association of Insurance Commissioners. In response, Obama-era health officials in 2016 restricted the short-term policies to three months.

The Trump administration now says that short-term plans can last up to 12 months and be renewed for up to 36 months.

Klein referenced a "premeditated destruction" of the ACA which has resulted in increased health coverage costs and depressed enrollment. The CMS projected that 600,000 people will buy the skinny coverage next year. The tax bill approved past year by Congress stops this financial penalty as of 2019. "They are not going to cover anything related to a pre-existing condition".

Senate Minority Leader Chuck Schumer of NY says Democrats will "do everything in our power" to stop the Trump administration's expansion of short-term health insurance plans.

Most exclude benefits for maternity care, preventive care, mental health services or substance abuse treatment.

The other ways they keep their premiums down is by offering bare-bones coverage in the first place.

The nonpartisan Congressional Budget Office estimates that roughly 6 million more people will eventually enroll in either an association plan or a short-term plan.

While most people in the ACA market will be shielded from the increases through federal premium subsides, those middle-class families in the market that do not receive subsides will bear the brunt of the higher costs.

Short-term plans have been around for decades, meant as a stopgap for job changers, students and others who found themselves without coverage.