New Trump Health Policy Would Make Coverage Options More Affordable
By Whitney Jones, Research Assistant, Domestic Policy Studies, Institute for Family, Community, and Opportunity at The Heritage Foundation, and Doug Badger, Senior Fellow at Galen Institute and Visiting Fellow at The Heritage Foundation.
The Trump administration moved on Tuesday to deliver affordable health care to millions of Americans with a proposed rule that would expand the availability of short-term, limited duration plans to one year.
The rule comes as a result of the president’s executive order calling on federal agencies to take the necessary measures to scale back Obamacare’s burdensome regulations.
Three weeks before leaving office, President Barack Obama reduced short-term limited duration coverage to less than 90 days, making it very risky for individuals to purchase these cost-effective alternatives to Obamacare plans. Prior to the Obama administration’s rule, Americans could maintain these plans for almost a year.
The Trump administration’s rule would allow these policies to last a year, returning to the rules that were in place prior to the Obama administration’s restrictions.
For consumers who do not have access to employer-based coverage and do not qualify for federal subsidies in the individual market, these short-term plans provide a cost-effective alternative to Obamacare plans. They are typically cheaper than the plans offered on the exchange, as they are exempt from Obamacare’s burdensome regulations and provide less benefits.
While the Trump administration is making an important move to increase choice and access to affordable health insurance, the proposal leaves open the question of whether short-term limited duration plans are renewable. This means Americans trapped in the broken Obamacare insurance market will still have to cross their fingers and hope they can secure coverage when their short-term plan ends.
Before issuing a final rule, the administration is taking comments on how it might allow for the renewability of short-term limited duration coverage. Officials hope to make these plans available to consumers later this year.
This is the right course of action: Consumers and insurers should be able to decide whether to renew these policies as well as purchase them. Government should get out of the business of micromanaging products and instead leave that to the private market.
Since the implementation of Obamacare, average premiums in the individual market have more than doubled and in some areas, tripled. This year, half the counties and 10 states have only one insurer offering coverage on the exchanges—meaning roughly 10 percent of exchange enrollees effectively have no choice in the market.
Americans continue to find that the plans offered on the exchanges do not provide the coverage they need at a price they can afford.
Rightly, the Trump administration has prioritized expanding the length of time individuals can maintain short-term limited duration plans. The rule proposed by the administration Tuesday would provide relief to people who have been stuck with unaffordable coverage options and limited access to care.
But the administration can only do so much to expand choices and offer Americans access to affordable, individualized care. Congress must take the next steps and pursue legislative reform.
Congress cannot stop with the repeal of the individual mandate—that was just the first step. There is more work to be done to bring relief to Americans being hamstringed by Obamacare.
In 2018, Congress should make every effort to pursue consensus solutions that empower individuals to control their health care dollars and decisions.
Americans in need of health care reform deserve nothing less.
*To view this commentary on The Daily Signal website, click here.