What is this about?
An executive order on health care has been signed by President Donald Trump yesterday, February 20, 2018. The US Department of Health and Human Services’ newly proposed regulations would allow Americans to buy short-term insurance that last just under a year. In addition, these short-term health insurance plans don’t have to adhere to the Affordable Care Act’s consumer protections.
“It’s one step in providing Americans with health insurance that is both more affordable and more suited to individual and family circumstances.” – Health and Human Services Secretary Alex Azar told reporters on Tuesday.
This further means that…
These proposed regulations aim to reverse Obama administration’s decision in limiting the duration of short-term plans to no more than 90 days. The Trump administration will allow people to buy non-Obamacare coverage for almost an entire year.
The Pros & Cons
- These short-term insurance policies are likely to be cheaper than Obamacare policies. However, these plans can deny Americans insurance based on their medical history. Also, they can charge higher premiums because of preexisting medical condition since these plans are totally free from the health care law’s insurance regulations.
- Furthermore, these short-term plans do not comply with some of the ACA’s central insurance protections. This means they do not have to offer comprehensive coverage (they can be without free preventative care or maternity, prescription drugs, and mental health benefits). In addition, they may only pay out a set amount – averaging to $1 million or less.
- Lower monthly premiums on these short-term policies may attract young and healthy consumers. But if you are on the “sickly” side and require medical care (or will need medical care in the long run), then you may face higher out-of-pocket costs and uncovered bills.
Effects on Affordable Care Act Market
It is being predicted that healthy consumers from the individual market will most likely shift to short-term insurance, leaving the older and sicker consumers protected by the ACA’s central insurance behind. This could mean that quality medical care and comprehensive coverage under the ACA may have higher premiums or may lead some if not all insurers to exit the market altogether.
On a positive note, the ACA has proven exceptionally tough amidst the Trump administration’s attempts to weaken it. On average, 12 million people still enrolled in marketplace plans despite HHS’ expenditure cuts on advertising and outreach.
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