This morning the Trump administration announced its decision to allow junk plans that can deny coverage to people with pre-existing conditions, that are not required to cover key benefits, such as cancer treatments and prescription drug coverage, and that can refuse to pay for costs by claiming that you had a pre existing condition you didn’t tell them about.  

News coverage has called the administration’s actions out for what they are: a blatant move to dismantle protections for people with pre-existing conditions and undermine the Affordable Care Act.

Headlines paint a telling picture:

  • HuffPost: Horrible Health Insurance Now Legal Again, Thanks To Trump. [HuffPost, 8/1/18]
  • Bloomberg: Short-Term Health Plans Backed By Trump Are Cheap For A Reason. [Bloomberg, 7/31/18]
  • Associated Press: Officials Are Promoting Lower-Cost, Short-Term Health Plans. [Associated Press, 8/1/18]
  • New York Times: ‘Short Term’ Health Insurance? Up To 3 Years Under New Trump Policy. [New York Times, 8/1/18]
  • San Diego Union-Tribune: Trump Administration Widens Availability Of Skimpy, Short-Term Health Plans. [San Diego Times-Union, 8/1/18]
  • Politico: Trump Whacks Obamacare By Boosting Short-Term Health Plans. [Politico, 8/1/18]
  • Washington Post: Trump Administration Widens Availability Of Skimpy, Short-Term Health Plans. [Washington Post, 8/1/18]
  • Los Angeles Times: Trump Administration Moves To Further Expand Skimpy Health Plans. [Los Angeles Times, 8/1/18]
  • NPR: Under New Rules, Cheaper ‘Short-Term’ Health Care Plans Now Last Up To Three Years. [NPR, 8/1/18]
  • Governing: Trump Administration Loosens Restrictions On Skimpy, Short-Term Health Plans. [Governing, 8/1/18]
  • Kaiser Health News: Trump Administration Loosens Restrictions On Short-Term Health Plans. [Kaiser Health News, 8/1/18]
  • The Cut: Trump’s New Insurance Rules Put Women And Children At Risk. [The Cut, 8/1/18]

Reporters have been quick to note that these plans will hurt consumers…

Los Angeles Times: Expanding Short-Term Plans Is Opposed By Nearly Every Patient Advocacy Organization In The Country. “Expanding short-term plans also risks driving up costs for Americans with preexisting medical conditions who need more comprehensive benefits…Among the groups that have opposed the Trump administration’s moves are virtually every leading patient advocacy organization in the country, including the American Lung Assn., the American Heart Assn., the Cystic Fibrosis Foundation, the March of Dimes, the National Multiple Sclerosis Society, Susan G. Komen, AARP and the advocacy arm of the American Cancer Society.

HuffPost: Short-Term Plans Provide Junk Coverage And Drive Up Costs Of Comprehensive Care. “Meanwhile, those seeking out comprehensive plans because they want or need them will discover those policies have gotten more expensive, thanks to the way short-term plans will affect the rest of the insurance market. Some insurance shoppers will have serious, even life-threatening diseases, such as cancer, which will mean their insurance must have a full set of benefits. But those kinds of policies will become more expensive than they can afford. [HuffPost, 8/1/18]

Bloomberg: Cheaper Plans “Can Come At A Cost.” “For some people, though, the cheaper premiums can come at a cost, such as when insurers claim that a cancer treatment shouldn’t be covered because a patient had the disease before buying coverage, as Bloomberg reported in October.” [Bloomberg, 7/31/18]

Short-Term Plans Sometimes Impose Unexpected Rules, Like For Instance Refusing To Cover Hospitalizations During The Weekend.There may be other strange rules. A review of some plan documents from Families USA found an Illinois plan that would cover only hospitalizations beginning during the week — inpatient stays that began on the weekend would not be allowed except in rare circumstances. Some plans had waiting periods for care. Cancer treatment, for example, is not covered in certain plans during the first month a person is enrolled in a plan, and no treatment for illness is covered in the first five days. That’s the kind of detail that might be easy to overlook when signing up for a plan if you aren’t expecting a cancer diagnosis.” [New York Times, 8/1/18]

….financially benefit insurance companies….

With Short-Term Plans, Insurance Companies Can Spend Less Money On Medical Care. “According to research from the National Association of Insurance Commissioners, the average short-term plan in 2017 spent less than 65 percent of premium dollars on medical care. Some of the short-term plans in the association’s analysis keep more than half of all premiums as overhead and profit.” [New York Times, 8/1/18]

Brokers Tend To Make Higher Commission On Short-Term Plans. “Brokers also tend to make higher commissions on the short-term plans, since the companies share a cut of their larger profits to get referrals. According to eHealth, a national online brokerage, a typical Obamacare-compliant plan pays a commission of around 5 percent, while short-term plans pay out commissions closer to 20 percent. Because short-term plans are currently limited to 90 days, brokers now make more money selling comprehensive plans that cover more benefits. But that math may shift as short-term plans expand their duration under the new rule, giving brokers a stronger financial incentive to sell short-term plans instead.” [New York Times, 8/1/18]

…and are designed to undermine access to affordable, comprehensive care.

Huffington Post: “The New Rules Represent One Of The Most Consequential Steps That President Donald Trump And His Republican Allies Have Taken In Their Campaign To Dismantle The 2010 Health Care Law Known As Obamacare.” [HuffPost, 8/1/18]

Washington Post: Making It Easier To Buy Plans That Circumvent The Law Part Of Trump’s Strategy To Undercut The ACA.“Making it easier to buy health plans that avoid the law’s protections is part of a strategy being employed by Trump and his aides of relying on executive powers to undercut aspects of the law, whose demolition has been one of Trump’s central goals since his 2016 campaign.” [Washington Post, 8/1/18]

San Diego Union-Tribune: Plans Are “Devised To Foster Low-Price Insurance That Circumvents The Affordable Care Act’s Coverage Requirements And Consumer Protections.” “The new rules are the second tool the administration has devised lately to foster low-price insurance that circumvents the Affordable Care Act’s coverage requirements and consumer protections. In June, the Labor Department issued rules that will make it easier for small companies to buy a type of insurance known as association health plans and, for the first time, allow them to be sold to people who are self-employed…Both can have bigger price differences between older customers and younger ones. But only the short-term plans can also charge higher prices to customers with medical conditions that require care, deny them coverage, or avoid covering health problems that a customer had before buying the insurance — all practices that the ACA bans.” [San Diego Times-Union, 8/1/18]