The Trump administration issued a final rule Wednesday allowing for the sale and renewal of more short-term health plans that are designed to be inexpensive, but do not have to cover pre-existing conditions or comply with other Affordable Care Act (ACA) coverage requirements.
Under the current rules, issued in 2016 by the Obama administration, short-term insurance cannot last for more than three months. Under the new rule, the policies will be available for a year at a time, and insurers would be allowed to extend policies for a maximum of three years.
The Trump administration says the new rule will take effect in two months, and the new plans are expected to be 50 to 80 percent cheaper than so-called Obamacare plans. The prices are lower, of course, because the benefits will be fewer and insurers do not have to cover pre-existing conditions as required by the ACA. Federal subsidies are not available for short-term policies.
Administration officials defended the move as part of the president’s promise to deliver more affordable and flexible health care solutions and said insurers will be required to tell consumers exactly what is and what is not covered by the new policies.
The short-term plans “may not be the right choice for everybody,” said HHS Secretary Alex Azar, “but we believe strongly in giving people options here.”
Democrats derided the short-term plans as “junk insurance” and further evidence that the Trump administration is simply intent on dismantling the Obama-era ACA.
“After an illness or an injury, many Americans who enroll in these GOP junk health coverage plans will end up being hit by crushing medical bills, finding that they have been paying for coverage that doesn’t cover much at all,” said House Minority Leader Nancy Pelosi (D-CA).