Since the Republican Congress hasn't managed to repeal the Affordable Care Act, the Trump administration is continuing its systematic destruction of the law. The latest step is the new rules allowing "short-term" insurance policies that don't comply with the law to be offered for longer periods. These policies don't cover pre-existing conditions, don't cover the essential benefits required by the law, and can impose annual limits on coverage.
Under current rules, such "short-term, limited-duration insurance" cannot last for more than three months. Under the proposal, the limit would be 364 days.
It was responding to an executive order by President Trump, who said the change would benefit consumers because "short-term, limited-duration insurance is exempt from the onerous and expensive insurance mandates and regulations" in the Affordable Care Act.
This, of course, threatens the Obamacare individual market, as Larry Levitt, a senior vice president at the Kaiser Family Foundation, explains. "If the short-term plans are able to siphon off the healthiest people, then the more highly regulated marketplaces may not be sustainable." Mike Kreidler, Washington state's insurance commissioner warns consumers against these plans. "If you get sick you may not be able to renew your coverage—there are no protections for people with pre-existing conditions. Maternity care and mental-health benefits often are excluded."
The administration says it expects between 100,000 and 200,000 people—the healthiest people—who are currently in the ACA markets to switch out. With healthy people leaving the ACA-compliant market, premiums will go up in them, but premium subsidies—for lower income people, anyway—will also increase. Costing the federal government more.
But going further, HHS is exploring not just increasing the length of these short-term policies—meant to be stop-gap coverage—but making them renewable. Which would make them not short term. And not allowed under existing law, as Nicholas Bagely, health law expert at the University of Michigan points out. "ACA rules don't apply to 'short-term limited duration insurance.' But a 364-day plan isn't of 'limited duration' and, if it's easily renewable, it's not 'short term.'" He adds "I'd love to litigate that case."
He may just get to do that.