Many Customers Will Welcome Short-Term, (Really) Affordable Health Insurance Plans

Trump agrees to let insurers sell cheaper health plans than ObamaCare

Today a new lawsuit is being filed by the cities of Baltimore, Cincinnati, Chicago and Columbus, arguing that President Trump's actions against the Affordable Care Act violate the U.S. Constitution.

"Our main concern is that OR consumers understand that these policies are not ACA compliant, and may not offer the same protections and health benefits as an ACA plan, such as emergency services, prescription drug coverage and maternity care", said Brad Hilliard, spokesman for Oregon's Department of Consumer and Business Services.

"We continue to see a crisis of affordability in the individual insurance market, especially for those who don't qualify for large subsidies", CMS Administrator Seema Verma said in a statement.

The plans don't have to comply with Affordable Care Act rules including: coverage of essential benefits; prohibition against medical underwriting; limits on premium variations based on age, sex or health status; elimination of annual and lifetime benefit caps; annual limits on out-of-pocket costs; and the requirement that plans spend no more than 20% of premiums on administrative costs and profit. While that allows the plans to have lower price tag - the average monthly premium for short-term health plans was $124 in 2016, compared to $393 for unsubsidized individual market plans - the coverage is less extensive. Since the Republican-led Congress was unable to repeal large parts of the statute previous year, 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.

The CMS rule released Wednesday will allow people to stay on a short-term health insurance plan for just under 12 months and make it easy to renew the plan for a total of three years. "There are very important benefits that are included in the ACA and are not in short-term" plans.

Short-term policies are available now, but consumers can only buy them for up to three months.

As younger, healthier people opt out of ACA markets, premiums will rise for people buying ACA-regulated plans. Three-quarters of respondents to a recent Kaiser Family Foundation poll said it is "very important" that Obamacare's rule prohibiting insurers from denying coverage due to a person's medical history remains law, while almost that many feel the same way about banning insurers from charging sick people higher rates. The short-term plans "provide a much more affordable option for millions of the forgotten men and women left out by the current system", he said.

57% cover mental health needs.

The administration estimates that premiums for a short-term plan could be about one-third the cost of comprehensive coverage. A recent study looked at short-term health plans sold in the Charlotte region and found that a lot of them didn't cover benefits for prescription drugs, mental health services, or substance use disorder treatment.

"Plans with ACA consumer protections will still exist", Levitt tweeted Wednesday. "ACA enrollees eligible for subsidies will be protected, but middle-class people with pre-existing conditions will feel the full brunt".

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. In turn, experts say, insurers will raise premiums to compensate for the increased average cost. In fact, some consumers with these plans have complained that they've been hit with unexpected expenses. "This will make a low-priced option like short-term insurance even more attractive, particularly if insurers further adapt their benefits and conditions of coverage to better align with the needs of the unsubsidized population". These issues have led to a large number of customer complaints - and the plans being banned completely in some states.



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