Pres. Trump's short-term health plans are cheaper but cover less

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The Department of Health & Human Services (HHS) has issued a final rule expanding short-term health plans that will improve patient access to healthcare coverage, according to the agency.

The Obama administration limited the sale of short-term plans to 90-day periods as a stop-gap between more robust plans. A recent study looked at short-term health plans sold in the Charlotte region and found that a lot of them didn't cover benefits for prescription drugs, mental health services, or substance use disorder treatment.

However, Edmund F. Haislmaier, senior health policy researcher of the conservative Heritage Foundation, said people who are already sick and getting Obamacare subsidies will not be affected.

Additionally, officials in the cities named in the suit believe the Trump administration's actions are unconstitutional in not "faithfully executing" the ACA. The Trump administration is clearing the way for insurers to sell short-term health plans as a bargain alternative to pricey "Obamacare" for consumers struggling with high premiums.

But the policies don't have to cover existing medical conditions and offer limited benefits.

Have you ever had a short-term insurance policy?

Senate Minority Leader Chuck Schumer of NY says Democrats will "do everything in our power" to stop the Trump administration's expansion of short-term health insurance plans.

The plans do not have to meet Obamacare's baseline coverage minimums, so things like prescription drugs or maternity care may not be covered under these plans. And, unlike Obamacare policies, they don't have to cap consumers' cost-sharing burden at $7,350 for 2018.

Short-term plans have been a niche product for people in life transitions, people switching jobs, people retiring before Medicare eligibility or people aging out of parental coverage. Even worse, not having it at all and forgoing preventive care as well as needed prescriptions and treatment? Still, the fact that people with pre-existing conditions - which could be anything from acne to cancer - can be discriminated against or not have bills related to the condition covered will likely cause many people with health problems to avoid the new plans. Three-quarters of respondents to a recent Kaiser Family Foundation poll said it is "very important" that Obamacare's rule prohibiting insurers from denying coverage due to a person's medical history remains law, while almost that many feel the same way about banning insurers from charging sick people higher rates.

In an April analysis, the Kaiser Family Foundation found that the short-term plans sold by two online private insurance marketplaces, eHealth and Agile Health, often charge one-fifth the premiums for the lowest-run ACA health plans. Major insurer United Healthcare is marketing short-term plans. This could have the effect of driving premiums slightly higher on the ACA exchanges, because healthier people will leave the market, according to the CBO.

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"Congress, the Administration, and the states should work to stabilize the individual market - not simply create a parallel market that works only for healthy people", wrote the Blue Cross Blue Shield Association, a national federation of 36 independent Blue Cross and Blue Shield Plans.

The real fear of critics of these plans is that they will give people an option other than the Affordable Care Act exchanges-and, if there is such an option, people will use it and harm the exchanges. Next year, there will be no tax penalty for someone who opts for short-term coverage versus a comprehensive plan, so more people might consider the option.

"The people who benefit most from this plan are self-employed or small business owners in the individual market that were hit the hardest by the skyrocketing premiums under Obamacare", said Haislmaier.

Allowing short-term plans to last longer is the latest move to change regulations issued by the Obama administration. "These may be a good choice for individuals, but they may also not be the right choice for everybody".

Brokers can make commissions of about 20% on short-term plans, compared with 5% on ACA plans.

The administration expects premiums for Obamacare plans to increase by 1% next year and by 5% in 2021 because of the shifts.

Four cities collectively filed a lawsuit Thursday against Trump over "waging a relentless campaign to sabotage and, ultimately, to nullify" the ACA, also known as Obamacare.

Earlier Wednesday, the Trump administration said it's clearing the way for health insurers to sell short-term plans as a low-priced alternative to pricey Obama-law policies for people struggling with high premiums.

The suit alleges that the Trump Administrations actions are "an affront to the rule of law". Also, the offerings could be less attractive to young women if they don't cover maternity benefits.

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