WASHINGTON -- President Donald Trump's administration is proposing to significantly broaden Americans' ability to rely on short-term health plans that do not comply with the Patient Protection and Affordable Care Act's benefits requirements and consumer protections.
Health and Human Services Secretary Alex Azar announced Tuesday morning that a rewrite of federal rules would extend the time consumers can hold such health plans from three months to 12 months.
The plans were intended until now to be a brief gap-filler for people between jobs or for college students taking a semester off. The administration is attempting to redefine them as part of its strategy to help consumers divert from Patient Protection and Affordable Care Act marketplaces, which Trump and his aides characterize as expensive failures.
"It's one step in the direction of providing Americans with health insurance options that are both more affordable and more individualized for families' circumstances," Azar said in a conference call with reporters to announce the proposed rule.
Seema Verma, administrator of the Centers for Medicare and Medicaid Services, echoed that portrayal of the rewrite as reforming the health care system.
"While in the past these plans have been a bridge, now they can be a lifeline," she said.
Democrats denounced the proposal as another attempt by Trump to sabotage the health law.
Sen. Ron Wyden, D-Ore., the senior Democrat on the Finance Committee, said the Trump administration was promoting "junk insurance."
The House Democratic leader, Rep. Nancy Pelosi, D-Calif., said people buying these plans could be "one diagnosis away from disaster, discovering they have been paying for coverage that may not cover basic care such as cancer treatment."
The proposed rule is the second that officials have designed since October, when Trump issued an executive order intended to widen the availability of health plans that skirt key insurance provisions under the Affordable Care Act.
The order is part of the administration's strategy to circumvent parts of the sprawling 2010 health-care law -- President Barack Obama's primary domestic legacy -- through executive actions. The moves are an alternate route given the Republican-led Congress' inability last year to dismantle much of the law, although Trump has urged lawmakers to try again, despite GOP Senate leaders' reluctance.
In this case, the idea is to make it easier for individuals and small businesses to buy alternative types of coverage with lower prices, fewer benefits and weaker government protections.
If the rule is finalized, consumers would be able to buy -- for just under a year at a time -- short-term plans that do not have to include the Affordable Care Act's 10 required health benefits and that can deny coverage or charge more to some customers who are in poor health.
The health officials played down criticism Tuesday by some consumer advocates that the short-term plans will drain healthy people from the Affordable Care Act marketplaces. Verma predicted that "only a very small number" of customers will defect from the federal insurance exchange or similar ones run by states.
Internal actuaries predict that the number is likely to be 100,000 to 200,000, said Verma, who added that "the shift will have virtually no impact" on insurance premiums in Affordable Care Act marketplaces. The main people who will buy short-term plans, she predicted, are millions of "healthy people sitting on the sidelines without coverage" as insurance rates have risen.
She did not mention that four-fifths of Affordable Care Act marketplace customers receive federal subsidies that cushion such premium increases.
At the moment, federal law does not allow the limited-duration plans to be renewed. But Verma said that, as part of a comment period on the proposal, the administration is asking for suggestions on how the government might start permitting some type of renewal.
Because their coverage can be skimpier than that offered by Affordable Care Act health plans, which are intended for people who cannot get affordable health benefits for a job, short-term plans do not count toward the law's requirement that most Americans carry health coverage. Verma said people who buy the limited plans could face federal penalties this year for violating the mandate. But that danger will disappear next year, when enforcement of the mandate will end under an element of the tax overhaul that Congress passed late last year.
Azar and Verma did not say when they expect such plans to be available for sale. The proposal will be open for comment for 60 days, after which officials will put it in final form.
Just after New Year's Day, the Labor Department took the first step under the president's order, proposing a regulation to widen access to a form of coverage known as association health plans that have long been a darling of conservatives.
The rule, still in draft form during a comment period, would reclassify such plans so that they no longer would have to include the essential health benefits -- including maternity care, prescription drugs and mental health services that the Affordable Care Act requires of insurance sold to individuals and small businesses.
And that rule would, for the first time, allow individuals to buy them. It also would broaden the circumstances under which the plans could be created, eliminating a long-standing requirement that any association must already have existed for a purpose unrelated to health insurance.
The insurance industry opposes both these maneuvers. America's Health Insurance Plans, an industry trade group, said in a recent position paper that the administration should "avoid policies that could further destabilize the individual market."
Kristine Grow, a spokesman for the trade group, warned that with the new rule proposed Tuesday, consumers may be confused and may see short-term policies as a substitute for major medical coverage.
"Expanded use of short-term policies could further fragment the individual market, which would lead to higher premiums for many consumers, particularly those with pre-existing conditions," Grow said.
At least one major health insurance company, United Healthcare, is already positioning itself to market short-term plans. Others in the industry see them as a niche product for people in life transitions.
"I certainly wouldn't recommend them to someone receiving a significant subsidy or who has ongoing health issues, but there are certain times and certain places where it makes sense," said Jeff Smedsrud, an insurance entrepreneur whose companies sell short-term plans.
Rep. Greg Walden, R-Ore., the chairman of the Energy and Commerce Committee, welcomed the administration's announcement as an important step to "expand consumer choice, competition and access to health care."
Information for this article was contributed by Amy Goldstein of The Washington Post; by Robert Pear of The New York Times; and by Ricardo Alonso-Zaldivar and Tom Murphy of The Associated Press.
A Section on 02/21/2018
Print Headline: Trump push on for lesser health plans