WASHINGTON (AP) - The Trump administration spelled out a plan on Tuesday to lower the cost of health insurance: give consumers the option of buying less coverage in exchange for reduced premiums.
The proposed regulations would expand an alternative to the comprehensive medical plans required under former President Barack Obama’s health law. Individuals could buy so-called “short-term” policies for up to 12 months. But the coverage would omit key consumer protections and offer fewer benefits, making it unattractive for people with health problems.
The plans would come with a disclaimer that they don’t meet the Affordable Care Act’s safeguards, such as guaranteed coverage, ten broad classes of benefits, and dollar limits on coverage. Insurers could charge more if a consumer’s medical history discloses health problems.
Nonetheless, administration officials said they believe the short-term option will be welcomed by people who need an individual health insurance policy but don’t qualify for the ACA’s income-based subsidies.
Those in this largely middle-class crowd make too much for subsidies and have absorbed years of price hikes. Some say they now face monthly, mortgage-size payments of well over $1,000 for health insurance. Then they usually have to pay a deductible of several thousand dollars. Research indicates the uninsured rate among these customers is growing.
“If you are not subsidized, the options can be really unaffordable for folks,” Health and Human Services Secretary Alex Azar told reporters. The administration estimates monthly premiums for a short-term plan could be about than one-third of what a comprehensive policy costs.
Democrats swiftly branded it a return to “junk insurance,” and the main insurance industry lobbying group said it was concerned the Trump plan could divide the healthy from the sick in the market and make it more expensive to cover those with health problems.
Democrats say the solution is to increase government subsidies, so that more middle-class people will be eligible for taxpayer assistance to buy comprehensive coverage. The Obama administration had limited short-term plans to periods of no longer than three months, making them impractical for many consumers.
Trump administration officials reject the notion that they’re trying to undermine the ACA. Instead, they say they are trying to make things more workable for people who are not being helped by the health law.
The administration estimates that only about 100,000 to 200,000 people will drop coverage they now have under the ACA and switch to cheaper short-term policies. They also say they expect short-term plans could attract many people among the estimated 28 million who remain uninsured.