Americans keep winning on health care reform. The
public may only hear about a bungling Congress that could not repeal and
replace the Affordable Care Act (ACA) – aka ObamaCare – even though it
has been imploding on its own.
Less publicized, the Trump administration continues to implement important, strategic reforms that empower consumers, lower the cost of insurance, and improve access to more affordable medical care. And the administration just delivered again. Secretary Alex Azar’s Department of Health and Human Services expanded the availability of short-term, limited duration insurance (STLDI) that is exempt from the coverage requirements and other regulations of the ACA.
STLDI was originally designed to fill a temporary gap in coverage of less than one year when transitioning between plans. President Obama’s HHS later finalized a rule in October 2016 that limited STLDI coverage to only three months. This new directive allows STLDI to last for up to 12 months, and it can be renewed for up to 36 months. For those Americans who prefer the choice of more affordable premiums in lieu of many of ObamaCare’s coverage mandates that made insurance significantly more expensive, that choice is now available.
The benefits are highly significant for those choosing this coverage. Premiums are estimated to cost about one-third of ObamaCare-compliant insurance, per eHealth data from Q4 2016. That provides a new opportunity for financial protection from catastrophic health expenses for those who were formerly choosing to remain uninsured, because expensive ObamaCare insurance was totally unaffordable.
This also benefits those who simply prefer to save money on premiums, rather than stretch to afford more expensive, more comprehensive insurance. Additionally, consumers who were buying ACA-compliant insurance just to escape the tax penalty that punishes people who would have bought non-ACA-compliant plans may also now opt for cheaper STLDI, given that the Trump administration reduced that penalty to $0 as of January 1, 2019. Beyond cheaper premiums, broader access to doctors and hospitals could also be available under STLDI compared to ACA-compliant plans that have very narrow provider networks.
But these new rules on limited mandate plans could be improved. For instance, these plans should be allowed for longer periods of time; they should be available to everyone, regardless of age or employment; and even more boldly, they should be included in Medicare and Medicaid as alternative, cheaper coverage coupled with an option for a defined benefit instead of traditional coverage. Why would anyone be against offering such choices to Americans and instead force them to buy coverage they don’t want or value for their hard-earned money?
To appreciate the potential impact of health reforms like this, we must also sort out fact from false political grandstanding about our current state of affairs under ObamaCare.
Contrary to the claims of those wedded to ObamaCare, the data shows that its regulations caused massive increases in insurance premiums and a disappearance of insurance options across the country. In its first four years, ObamaCare insurance premiums for individuals doubled while for families they increased by 140 percent. Shockingly, this occurred even though insurance deductibles for individuals increased by over 30 percent for individuals and by over 97 percent for families, according to eHealth data.
As time passes, insurance options and prices on ObamaCare Exchanges continue to worsen, according to HHS data. For 2018, only one Exchange insurer offered coverage in each of approximately one-half of U.S. counties; many more counties had a choice of only two companies in their Exchanges. Moreover, many Exchange enrollees continue to face large year-on-year premium increases in 2018, according to Kaiser Foundation analysis, even in the face of markedly higher deductibles. And the spectrum of doctors and specialists accepting that insurance continues to sharply narrow, with far fewer specialists than non-ACA Exchanges. Almost 75 percent of plans are now highly restrictive.
Despite the failure of the Republicans in Congress to completely repeal the ACA, this administration has repeatedly made significant inroads toward providing more affordable health coverage and care to more Americans. New association health plans for small businesses and other groups, expanded health savings accounts, and broader access to limited mandate insurance coverage through STLDI are all important steps toward more affordable health care.
Although such arcane rule changes likely cause eye-rolling and yawns among many, these important steps remove harmful regulations from the previous administration that hurt consumers. While Americans are likely not yet “tired of winning,” expanding limited mandate insurance is a clear victory for consumers.
Scott W. Atlas is the David and Joan Traitel Senior Fellow at Stanford’s Hoover Institution and the author of “Restoring Quality Health Care: A Six Point Plan for Comprehensive Reform at Lower Cost (Hoover Institution Press, 2016).
Less publicized, the Trump administration continues to implement important, strategic reforms that empower consumers, lower the cost of insurance, and improve access to more affordable medical care. And the administration just delivered again. Secretary Alex Azar’s Department of Health and Human Services expanded the availability of short-term, limited duration insurance (STLDI) that is exempt from the coverage requirements and other regulations of the ACA.
STLDI was originally designed to fill a temporary gap in coverage of less than one year when transitioning between plans. President Obama’s HHS later finalized a rule in October 2016 that limited STLDI coverage to only three months. This new directive allows STLDI to last for up to 12 months, and it can be renewed for up to 36 months. For those Americans who prefer the choice of more affordable premiums in lieu of many of ObamaCare’s coverage mandates that made insurance significantly more expensive, that choice is now available.
The benefits are highly significant for those choosing this coverage. Premiums are estimated to cost about one-third of ObamaCare-compliant insurance, per eHealth data from Q4 2016. That provides a new opportunity for financial protection from catastrophic health expenses for those who were formerly choosing to remain uninsured, because expensive ObamaCare insurance was totally unaffordable.
This also benefits those who simply prefer to save money on premiums, rather than stretch to afford more expensive, more comprehensive insurance. Additionally, consumers who were buying ACA-compliant insurance just to escape the tax penalty that punishes people who would have bought non-ACA-compliant plans may also now opt for cheaper STLDI, given that the Trump administration reduced that penalty to $0 as of January 1, 2019. Beyond cheaper premiums, broader access to doctors and hospitals could also be available under STLDI compared to ACA-compliant plans that have very narrow provider networks.
Despite the failure of the Republicans in Congress to completely repeal the ACA, this administration has repeatedly made significant inroads toward providing more affordable health coverage and care to more Americans.This administration understands that the factors by which the ACA contributed to rising premiums must be eliminated, and broader access to STLDI is an excellent step. STLDI coverage is cheaper because it is tailored coverage that circumvents the ACA’s excess mandated coverage and its harmful regulations. That includes the ACA’s required “essential benefits” that increased premiums by 10 percent; the ACA’s 3:1 age rating that raised premiums for younger enrollees by 19 percent to 35 percent; the “guaranteed issue” that gave people incentives to remain uninsured until they were sick, a grossly misguided rule that raised premiums for everyone regardless of age or city by 46 percent; and hopefully many of the costly and often unwanted state coverage mandates now totaling over 2,270 for everything from acupuncture to marriage counseling to massage therapy.
But these new rules on limited mandate plans could be improved. For instance, these plans should be allowed for longer periods of time; they should be available to everyone, regardless of age or employment; and even more boldly, they should be included in Medicare and Medicaid as alternative, cheaper coverage coupled with an option for a defined benefit instead of traditional coverage. Why would anyone be against offering such choices to Americans and instead force them to buy coverage they don’t want or value for their hard-earned money?
To appreciate the potential impact of health reforms like this, we must also sort out fact from false political grandstanding about our current state of affairs under ObamaCare.
Contrary to the claims of those wedded to ObamaCare, the data shows that its regulations caused massive increases in insurance premiums and a disappearance of insurance options across the country. In its first four years, ObamaCare insurance premiums for individuals doubled while for families they increased by 140 percent. Shockingly, this occurred even though insurance deductibles for individuals increased by over 30 percent for individuals and by over 97 percent for families, according to eHealth data.
As time passes, insurance options and prices on ObamaCare Exchanges continue to worsen, according to HHS data. For 2018, only one Exchange insurer offered coverage in each of approximately one-half of U.S. counties; many more counties had a choice of only two companies in their Exchanges. Moreover, many Exchange enrollees continue to face large year-on-year premium increases in 2018, according to Kaiser Foundation analysis, even in the face of markedly higher deductibles. And the spectrum of doctors and specialists accepting that insurance continues to sharply narrow, with far fewer specialists than non-ACA Exchanges. Almost 75 percent of plans are now highly restrictive.
Despite the failure of the Republicans in Congress to completely repeal the ACA, this administration has repeatedly made significant inroads toward providing more affordable health coverage and care to more Americans. New association health plans for small businesses and other groups, expanded health savings accounts, and broader access to limited mandate insurance coverage through STLDI are all important steps toward more affordable health care.
Although such arcane rule changes likely cause eye-rolling and yawns among many, these important steps remove harmful regulations from the previous administration that hurt consumers. While Americans are likely not yet “tired of winning,” expanding limited mandate insurance is a clear victory for consumers.
Scott W. Atlas is the David and Joan Traitel Senior Fellow at Stanford’s Hoover Institution and the author of “Restoring Quality Health Care: A Six Point Plan for Comprehensive Reform at Lower Cost (Hoover Institution Press, 2016).
