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

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Administration officials say the short-term plans will provide a cheaper health insurance alternative for those who can't afford to buy coverage on the Obamacare exchanges.

Consumers paid more for fewer choices under the Affordable Care Act, Health and Human Services Secretary Alex Azar 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.

The administration said the plans can last up to 12 months and will be allowed to be extended to a maximum of three years - reversing Obama-era rules that limited the coverage to no more than three months.

President Trump has consistently declared that the Affordable Care Act - commonly referred to as Obamacare - is a broken mess, and after several unsuccessful attempts to repeal the national health care law, he has eagerly anticipated that it will "fail" and "implode".

"These policies are different from those offered on the exchange", said James Parker, a senior adviser for health reform at HHS, in a conference call with reporters.

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Azar described the plans as being for people "in the gig economy, who are independent contractors who may not get employer insurance; for those individuals who may have three part-time jobs and not get employer insurance; for those people transitioning between jobs; for the kid who left school and is headed to a job, but doesn't have insurance; or for the folks in rural America where they may not have access to an affordable Obamacare plan".

Administration officials estimate plan premiums could be half the cost of the more comprehensive ACA insurance.

The administration expects about 600,000 people to enroll in a short-term plan in 2019, with as many as 200,000 dropping out of ObamaCare to take advantage of the cheaper coverage.

Also, short-term plans don't have to offer comprehensive coverage.

"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.

Officials unveiled a final rule that will make it easier to obtain coverage through short-term health insurance plans, which don't have to adhere to the law's consumer protections.

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"Short-term Limited Duration Insurance can be a valuable option for many consumers". All have warned that consumers with bare-bones plans would be stranded when they need care - and that the defection of low-priced customers from ACA marketplaces would drive up prices for those who remain.

We are the wealthiest nation in the world and it's a disgrace that tax cuts to the wealthy supersede caring for the basic needs of its people.

With the three-month restriction on short-term plans, people's deductibles were reset every three months. They can include dollar limits on coverage and there's no guarantee of renewal.

DE insurance broker Nick Moriello said consumers should carefully consider their choice.

"It could cause thousands of families to lose everything they've worked so hard for when they are struck by illness or injury and their health plan does not protect them from financial ruin", the letter to HHS said. Major insurer UnitedHealthcare is marketing short-term plans. The move allows small businesses and the self-employed to join together based on their industry or location and purchase health insurance through association health plans. Also, the offerings could be less attractive to young women if they don't cover maternity benefits.

"It's a way better alternative to not being insured", said Jeff Smedsrud of Pivot Health.

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The lawsuit will use quotes from President Trump, as well as tweets he has made, in order to show his intent in undermining the law, and it will try to convince a court to force the president into expanding ObamaCare enrollment, rather than trying to sabotage it. The Centers for Medicare and Medicaid Services has estimated that an additional 1.6 million people may sign up for the plans once they become more widely available.

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