The Trump administration plan to expand access to short-term insurance plans could destabilize California’s successful health insurance market and increase premiums for Californians, according to a new analysis by Georgetown University’s Center on Health Insurance Reforms. The policy change being considered by the Trump administration is just another way Republicans would make health care less effective and more expensive for most Californians.
Short-term insurance products are intended for a very specific purpose: protecting consumers during short breaks between coverage. For example, a person who changes jobs might purchase a short-term plan to cover the period before new employee benefits start. Under current federal rules, consumers can only use them for 90 days, as they are not intended to replace long-term health insurance.
Due to their limited use, the plans are exempt from covering many of the essential health benefits required by the Affordable Care Act (ACA), including maternity care, newborn care, and coverage for substance abuse (such as treatment for opioid addiction). The plans can also reject patients with pre-existing conditions.
The Trump administration wants to make these short-term plans available for an entire year, a move experts warn will “draw more healthy people who want either cheap coverage or none at all out of the marketplaces, leaving an increasingly sick and expensive population behind.”
Making bare-bones short-term plans available to compete with ACA-compliant plans, combined with changes to the ACA slipped into the unpopular tax bill, could be “devastating” for Covered California according to one insurance expert. Another called it a “perfect storm,” that could lead to premium hikes and fewer insurers offering quality plans.
With an estimated 620,000 people signing up for a bare-bones plan, one insurance agent estimated premiums could increase by 10 percent for the rest of Californians on the exchange if this change happens. Other comprehensive analyses show premium spikes of up to 30 percent for Californians next year.
“Continuing actions on the part of the administration to systematically undermine the market and make it almost impossible to carry out the mission,” said Chet Burrell, CEO of CareFirst Blue Cross Blue Shield, one of the largest insurers in the mid-Atlantic region of the U.S. He also said that recent changes and instability, under Republican leadership in Congress and in the White House, has made the situation “materially worse.”
Four million people across the country have lost health insurance since 2016, largely due to Republican policy changes to health care.
Despite misleading rhetoric from Republicans, the ACA, or Obamacare, were relatively stable heading into the Trump administration. “Going into 2017, the individual insurance markets were largely stabilizing in terms of enrollment and issuer profitability,” said Covered California.
With Trump and Republicans, policy changes are leading to dramatically higher premiums and widespread loss of coverage. Voters are increasingly anxious about health care, and especially health care costs.
And now, rather than listen to the will of Californians who called for both parties working together to improve Obamacare, the Trump administration is working to further destabilize the insurance market.