Would ‘Skinny’ Health Plans End Up Raising Premiums for Some?

The Trump administration wants to make it easier for people to buy cheaper health insurance, but Obamacare fans charge that the rule it is proposing will end up raising premiums for many.

The proposal follows up on an executive order issued in 2017 by President Donald Trump. It would extend sales of short-term plans that don't have to meet Affordable Care Act requirements for up to a year. Under a 2016 Obama administration rule, the plans can only be sold for up to three months.

The plans don’t usually cover people with pre-existing conditions, as ACA-compliant plans must, nor do they have to offer the ACA’s essential health benefits like maternity care, mental health, and prescription drugs.

The proposed rule, if finalized, “will drive up premiums in the marketplaces,” Dania Palanker, an assistant research professor with Georgetown University's Center on Health Insurance Reforms, told me.

“Expanding the short-term market will really siphon healthy people out of the individual market,” Palanker said. As healthy people leave the individual market, those staying in “will find it harder to afford health insurance.”

That in turn could raise premiums, and result in more people being uninsured, Palanker said.

The administration says the proposed rule is necessary to help people who can’t afford the ACA’s spiraling premiums.

Insurance premiums doubled from 2013 through 2017, and 50 percent of counties, covering 30 percent of Americans, have only one plan, Department of Health and Human Services Secretary Alex Azar told reporters at a briefing I covered.

Premiums for short-term plans in the fourth quarter of 2016 averaged $124 a month, compared with an average of $393 a month for unsubsidized ACA-compliant plans, Azar said.

“We believe this can be a meaningful option, an alternative to Affordable Care plans, for the right individuals,” the secretary said.

Bruce Telkamp, chief executive officer and founder of AgileHealthInsurance.com, which sells non-ACA-compliant plans, told me that the primary reason why consumers purchase the short-term plans has been that they've lost employer sponsored coverage.

“It's been a myth that consumers are purchasing these plans in lieu of long-term coverage,” Telkamp said. AgileHealthInsurance issued a report on the short-term plans Feb. 20.

People need to be able to purchase the coverage for longer than three months, Telkamp said. The average period of unemployment is six months, he said. “The three-month rule harmed a lot of consumers.”

Read my full article here.

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