Last Call For Trumpcare Returns

Trumpcare is coming whether you want it or not, and the latest broadside to try to sink the Affordable Care Act is turning cheap, garbage temporary health insurance plans into year-long plans that will happily wreck the market.

It’s another day and the Trump administration is trying to stick another knife in the Affordable Care Act. This time it comes courtesy of a proposed expansion in the length of time a household can receive a lower cost, short-term health-coverage plan that does not meet the Affordable Health Care’s standards for insurance.

Under the new proposal, households can purchase the more limited plan for a year — up from three months.

If this proposal goes through — and the chances are very high that this regulatory change will ultimately be finalized — it could cause enormous damage to the Affordable Care Act, while at the same time not do a thing to help people with the increasingly high cost of health insurance.

That’s not what the Trump administration says, of course. Officials claim people will find it easier to afford health insurance under the new rules. As Seema Verma, administrator for the Centers for Medicare and Medicaid Services, tweeted out this morning: 

Today, @HHSgov and @CMSgov took a decisive first step to help Americans left behind by #Obamacare. Our short-term, limited-duration (STLD) insurance plan will provide increased consumer choice to those who can’t afford the current system’s skyrocketing premiums.

— Administrator Seema Verma (@SeemaCMS) February 20, 2018

The short-term plans are currently limited to three months of use. The ACA originally intended them as stop-gap coverage — if, say, someone is in-between jobs or transitioning between work and school. The ostensible goal of lengthening that period is to extend coverage to people who are currently not covered by the ACA — because they cannot afford the premiums — by creating longer-term cheap insurance options.

It’s true that these plans will be cheaper than typical insurance. But there is a reason for that. As Sabrina Corlette, senior research fellow at Georgetown University’s Center on Health Insurance Reforms put it to me Tuesday: “The first thing for people to know is that these plans are not health insurance.”

As Corlette explained, under the ACA, insurance companies have a lot more leeway with the short-term plans. They can screen people for preexisting conditions — and either charge them more or refuse to offer them a policy entirely. The short-term plans don’t need to offer coverage for things such as prescription drug coverage, maternity care and mental-health services. They can impose an annual or overall lifetime limit on how much they will cover.

All of these things are prohibited for ordinary plans under the ACA. And so, by trying to expand the period the shorter-term plans can be utilized by consumers (by the way, the administration is also contemplating allowing people to renew the plans), the administration is essentially setting up a parallel system to the ACA, and one that allows insurance companies to offer much skimpier plans in the way of benefits.

In other words, by turning the temp plans into 12 month plans, Trumpcare will flood the market with cheap plans that people will buy thinking Trump "saved them money".  The damage will be catastrophic and it almost certainly means that insurance companies will turn the market of good plans into a dumpster fire.

Between this and the death of the individual mandate, the ACA is pretty much done.