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Trump’s cheaper short-term health plans have coverage shortfalls

Associated Press

WASHINGTON (AP) — The Trump administration on Wednesday cleared the way for insurers to sell short-term health plans as a bargain alternative to pricey Obama-administration policies for people struggling with high premiums.

But the new policies don’t have to cover existing medical conditions and they offer limited benefits. That may not turn out to be especially appealing to people who need individual policies.

“For many who’ve got pre-existing conditions or who have other health worries, the Obamacare plans might be right for them,” Alex Azar, Health and Human Services Secretary, acknowledged on the TV show Fox & Friends. “We’re just providing more options.”

Officials say the plans can now last up to 12 months and be renewed for up to 36 months. But there’s no federal guarantee that they can be renewed. The plans will carry a disclaimer that they don’t meet the Affordable Care Act’s requirements and safeguards.

Unable to repeal much of the law known widely as Obamacare, Trump’s administration has tried to undercut how it’s supposed to work and to give additional options to people whose incomes are enough to prevent them from being able to receive ACA subsidies.

Officials are hoping short-term plans will fit the bill. Next year, there will be no tax penalty for someone who chooses short-term coverage rather than a comprehensive plan, so more people might consider that option. More short-term plans will be on offer starting this fall.

But critics say the plans are “junk insurance” that could lead to unwelcome surprises if a policyholder gets sick. The contend the plans will entice healthy people away from the Obamcare law’s markets, raising premiums for those who are left. Under the Obama administration, such plans were limited to three months’ duration. Some states do not permit them.

A big insurer group quickly expressed disapproval.

“The broader availability and longer duration of slimmed-down policies that do not provide comprehensive coverage has the potential to harm consumers, both by making comprehensive coverage more expensive and by leaving some consumers unaware of the risks of these policies,” said Justine Handelman of the Blue Cross Blue Shield Association, whose members are a mainstay of ACA coverage.

President Donald Trump has been enthusiastic. “Much less expensive health care at a much lower price,” he said, previewing the plans at a White House event last week. “Will cost our country nothing. We’re finally taking care of our people.”

The administration estimates that premiums for a short-term plan could be about one-third the cost of comprehensive coverage. A standard silver plan under the Obama law now costs $481 a month on average for a 40-year-old nonsmoker. A short-term plan might cost $160 a month or even less.

But short-term insurance clearly has fewer benefits. A Kaiser Family Foundation survey of current plans found none that would cover maternity costs, and many that would not cover prescription drugs or substance-abuse treatment — all of which is required coverage under the Obama law. The new plans can also have dollar limits on coverage and offer no guarantee of being able to be renewed.

Senate Democratic leader Chuck Schumer of New York said Democrats will “do everything in our power” to block the administration. It wasn’t immediately clear how that might happen.

Short-term plans have been a niche product for people who are making big changes in their lives: those who are switching jobs, retiring before being able to get Medicaid or becoming too old to be covered by their parents’ plans.


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