Administration opening up new insurance options

douglas O’Brien

All over our country, many Americans continue to struggle to pay for health insurance coverage. Premiums for Americans who buy their own insurance, rather than receiving it from an employer, have doubled since the implementation of Obamacare. Those increases have hurt our communities and put too much strain on the lives of our families, friends, and neighbors.

Rising premiums have especially hurt the millions of middle-class Americans who aren’t eligible for Obamacare subsidies. President Trump promised to help those left behind by Obamacare, and he’s taken action. Earlier this month, the Trump Administration finalized new regulations for a type of insurance plan that will help the 28 million forgotten men and women who remain uninsured under Obamacare.

In many states, these plans, known as “short-term, limited-duration” insurance, have for decades offered insurance for Americans for up to 12 months. The Obama administration limited the plans nationally to just three months, effectively eliminating this affordable option for many.

Subject to state regulation, the Trump Administration will now allow these plans to last up to 12 months once again, and allow them to be renewed for up to 36 months in total.

These plans may be a welcome relief to consumers in states covered by Region V of the U.S. Department of Health and Human Services. In Michigan, for instance, premiums rose 90 percent from the implementation of Obamacare’s major regulations through the end of President Obama’s term in office.

Here are some things you should know about these plans:

≤ What will they cost? While state regulations can affect prices, short-term, limited-duration plans are expected to be 50 to 80 percent cheaper on average nationally than Obamacare plans.

≤ How many people will buy them? Experts estimate that as many as 2 million or more Americans will enroll in one of these plans.

≤ What do these plans cover? Coverage of medical services and levels of co-pays and deductibles will vary by insurer and depend on state regulation.

The Trump administration has instituted robust requirements for informing consumers about the limits of this option: Insurers offering short-term, limited-duration policies will be required to prominently display in the contract and in application materials that the policy is not required to comply with federal requirements for health insurance, including the rules created by Obamacare.

What kind of consumers do they make sense for? Short-term, limited-duration insurance makes sense for Americans who don’t have or cannot afford other sources of coverage. That includes Americans who:

≤Don’t have access to health insurance coverage through their employer, perhaps because they work multiple part-time jobs

≤Are independent contractors or self-employed in today’s “gig economy,” and can’t afford Obamacare plans

≤Are between jobs or other sources of coverage, like young people who have graduated from college but aren’t yet employed

Will I be able to keep these plans if I get sick? The federal government has said that consumers can be allowed to purchase plans with guaranteed renewability of up to 36 months. Based on this flexibility, consumers may be able to lock in their premiums at a certain level and keep their coverage for up to three years, protecting them from rate increases during this time in the event that they get sick. The availability of these options will depend on insurers’ decisions and state regulation.

Do these plans satisfy the individual mandate for health insurance? No. However, beginning in January 2019, thanks to legislation signed by President Trump, the individual mandate for health insurance will no longer carry any penalty.

Eliminating the individual mandate penalty and expanding access to these short-term, affordable plans are just part of the Trump Administration’s efforts to ensure that as many Americans as possible have access to affordable health insurance. We have also expanded access to association health plans, which allow small businesses and self-employed Americans to band together to buy insurance, and continue to work with states to open up more affordable options and bring down premiums.

The Trump administration is working hard to ensure that healthcare is affordable and accessible for all Americans, and the recent news about short term plans is just one more example of President Trump living up to one of the promises he made to the American people.

Editor’s note: Douglas O’Brien is regional director for the U.S. Department of Health and Human Services, serving as as Secretary Azar’s representative in the Great Lakes region.