Federal Proposal Could Make It Easier To Get Short-Term Health Insurance

Feb 20, 2018

It could soon be easier to get short-term health insurance under proposed rules released by the Trump administration Tuesday.

The administration says short-term plans are an affordable alternative to plans offered on the Affordable Care Act marketplace. But health care advocates say the cheaper options actually come at a cost.

When you’re between jobs or unexpectedly lose health coverage for some other reason, short-term health insurance is designed to be used as a stopgap. The plans offer coverage for three months at a time, but the Trump administration wants to extend that period to nearly one year.

Trish Riley, the director of the National Academy for State Health Policy, says it’s an attempt to create a lower-cost product in the marketplace.

“But they’re products that will offer significantly less for that lower cost,” she says.

That’s because these short-term plans eliminate many of the Affordable Care Act’s consumer protections. They don’t have to cover essential health benefits like maternity care or mental health and substance use disorder treatment. They can exclude people with pre-existing conditions.

Riley says they can impose lifetime cost limits.

“If you have a lifetime limit on a plan and you get a significant diagnosis of cancer or some horrible disease that’s very costly or need drugs that are very costly, you may not have it covered,” she says.

The plans could also cause problems for people who don’t buy them, says Mitchell Stein, an independent health policy consultant.

“These plans are going to be attractive to healthy people who have less claims, and take them out of the ACA plans. By doing so it means the people remaining in the ACA plans will be less healthy, have greater claims, and so those premiums will continue to rise at a large rate,” he says.

Stein says it’s another attempt, like the elimination of the individual mandate, to undermine the ACA.

In a statement about the proposed rules, the head of the Centers for Medicare and Medicaid Services, Seema Verma, says allowing short-term insurance to cover longer periods “gives Americans options and could be the difference between someone getting coverage or going without coverage at all.”

The public has 60 days to comment.