Having failed to repeal Obamacare outright through legislative action, President Donald Trump is looking to chip away at the law's provisions in an attempt to weaken the system and ensure its demise.
Part of that plan involves making changes to Obamacare's strict regulation of short-term health insurance policies, the type intended to fill in temporary coverage gaps.
By broadening access to policies without basic coverage, like maternity care and mental health treatment, and making it easier to sell policies that exclude those with pre-existing conditions, the Trump administration will cater to the young and healthy while doing harm to older and sicker Americans.
Making matters worse, the administration appears uninterested in Obamacare enforcement, allowing at least one state to flout the law without consequence.
The Health and Human Services Department published new rules Tuesday that widen access to “short-term” health plans, a small subset of insurance products that are meant to cover short gaps in insurance coverage. The Obama administration aggressively regulated these plans, allowing insurance companies to sell them only as 90-day options.
The Trump changes allow insurance companies to sell the skimpier plans for a year, encouraging many more people to buy them and use them as a more regular source of coverage. Officials are also considering allowing insurance companies to extend them further.
As more young and healthy individuals opt for such plans, premiums will rise for the older and sicker population, effectively relinquishing the benefit of Obamacare's markets.
“This all looks a lot like the landscape in 2013 [before the Affordable Care Act took effect],” said David Anderson, a research associate at the Margolis Center for Health Policy at Duke University whose work focuses on health insurance design.
So how might this new scenario play out?
The time allowed for short-term plans will be expanded:
In 2015, the government limited these types of short-term plans to only offering 90-day policies that were not renewable. Now the Trump administration is going in the opposite direction: allowing these “short-term” policies to run for 364 days and exploring whether to allow consumers to renew them.
Premiums for those participating in Obamacare markets will likely rise:
What type of people are likely to lose in this scenario? Anderson thinks of a family that was often described by Sen. Bill Cassidy (R-LA) during the Obamacare repeal debate as paying $40,000 in annual premiums (the Washington Post tracked down this family and found it was closer to $31,000, or $2,654 each month for a family of four).
That family has a daughter who has seizures and needs four different medications. They earn too much to receive Obamacare subsidies (the family says their income is somewhere in the six figures, described by one family member as “not high but middle class”), so they pay their full premium.
This family’s premiums are a significant burden, no doubt. But these new “choices” won’t fix that problem because the short-term plans won’t accept a family whose child has significant, expensive medical needs. They aren’t required to take on enrollees with preexisting conditions, so they won’t. Those people are expensive and raise premiums.
And adding insult to injury, the Trump administration appears less willing to confront states that are not following the law:
Take a look at the situation currently unfolding in Idaho.
A few weeks ago, state regulators sent health plans a bulletin. It said that they could once again start charging higher prices to people with preexisting conditions. They could once again exclude coverage for expensive medical needs, such as pregnancy, or decide to charge their female enrollees higher premiums. These are all practices that the Affordable Care Act clearly bars.
When questioned on the issue by reporters, Health and Human Services Secretary Alex Azar indicated he was not overly concerned by Idaho's actions.
Azar faced questions about the Idaho situation in a Tuesday briefing with reporters. He said he wasn’t “in a position to rule on something I’ve seen a media report about.”
And Azar is the exact person who is in the position to act on Idaho. Traditionally, you’d expect the federal government to step in at this point and enforce a law when the state refuses. But so far, nothing has happened. Observers worry this could encourage other states to take similar steps, as they’ll no longer fear federal interference.