Trump administration proposes skimpier, cheaper health insurance plans

Health and Human Services Secretary Alex Azar speaks to the House Ways and Means Committee last week in Washington about the FY19 budget

Health and Human Services Secretary Alex Azar speaks to the House Ways and Means Committee last week in Washington about the FY19 budget

The rule, which has not been finalized, was in response to a 2017 executive order by President Donald Trump and was proposed jointly with the Labor and Treasury Departments.

The Trump administration finds itself in an awkward situation as it touts its business-friendly tax legislation at the same time hundreds of companies face fines for violating Obamacare's employer mandate, even though the president has done nearly everything in his power to abolish the federal health care law, Politico reported on Wednesday. It aims to increase options for lower-cost health care plans that usually have more coverage limits and fewer benefits.

The proposed rule is open for public comment for the next 60 days.

"Americans need more choices in health insurance so they can find coverage that meets their needs", HHS Secretary Alex Azar said in a statement. And if you're among the one in four Americans who has a pre-existing condition, today's news is especially bad: "These skimpy plans will once again allow insurers to discriminate against you based on your medical history". "But the administration is right in a sense: people who will become uninsured once the individual mandate is repealed, because premiums will go way up for the unsubsidized, may be interested in these short-term plans".

"If individual market single risk pools change as a result, it would result in an increase in premiums for the individuals remaining in those risk pools", the proposed rule said, adding this may also increase costs for the federal government as it will pay more in premium support subsidies if rates rise.

The Trump administration announced Tuesday that it is moving to expand the use of low-budget temporary insurance, which could offer customers a cut-rate alternative to plans on the Affordable Care Act's exchange, but undermine more comprehensive insurance for others.

Just before President Barack Obama left office, the Department of Health and Human Services pushed through a regulation that limited the ability of people to buy short-term, limited-duration health insurance coverage plans.

Also, short-term plans don't have to offer comprehensive coverage.

If insurers decide too few customers will be interested, he said, they might not put effort into offering a variety of plans. Under Obama, short-term plans were limited to periods of no longer than three months. CMS projects that between 100,000 and 200,000 people will shift from the individual marketplace to short-term plans.

Insurers also aren't required to guarantee the renewal of short-term plans, although CMS is requesting comments about what how to best incorporate renewability options. The most successful attempt this country ever made at catching up with the rest of the industrialized world and the primary policy goal of conservative Republicanism is to gut it and return us all to the status quo ante.

The administration also issued separate regulations January 4 that would make it easier to form "association health plans", which are offered to small businesses through membership organizations. Another issue is that these plans could leave people with costly bills when they actually need medical help.

Rising premiums have squeezed a growing number of consumers, particularly those who make too much to qualify for government assistance through the healthcare law, often called Obamacare.

Extending short-term plans to a full year could be a benefit to consumers because they must pass the health questionnaire only once.

The proposed rule on short-term coverage is the latest in a series of Republican-led reforms aimed to speed the demise of Obamacare. It will end enforcement on the individual mandate that most Americans have healthcare coverage or pay a penalty in 2019. Having failed to repeal "Obamacare", Trump is now chipping away at it through regulations and waivers. He said he'd provide 'great health care for a fraction of the price.' Yet, his administration is giving insurance companies the green light to sell sham insurance to vulnerable families.

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