“Our healthcare environment is incredibly complex and is changing rapidly”
– Kathy Giusti
Short-Term Insurance in the U.S.
Healthcare is in the headlines again.
On February 20, 2018, the Departments of Health and Human Services, Labor, and the Treasury proposed new regulations, which would offer Americans more-affordable healthcare. The proposal aims to offer “high-quality care at affordable prices for the American people,” by extending the limit on short-term limited-duration insurance (STLDI), from 3 to 12 months.
Here’s what you need to know.
What’s Wrong With the Current Situation?
One of the limitations of the Affordable Care Act (ACA), also known as Obamacare, is the high premiums it imposes on middle-class Americans.
Although, “Short-term, limited-duration insurance is generally more affordable than ACA-compliant plans,” because “STLDI is exempt from the onerous and expensive insurance mandates and regulations included in title I of the PPACA,” it hasn’t been much of an option. “The previous administration took steps to restrict access to this market by reducing the allowable coverage period … to less than 3 months and by preventing any extensions … beyond 3 months of total coverage.”
Though, the Trump administration has repeatedly attempted to do away with Obamacare, it has constantly come up short. In an attempt to bypass the part of the act, on October 12, 2017, President Trump signed an executive order, criticizing the current situation in terms of premium costs and lack of competition:
“The Patient Protection and Affordable Care Act (PPACA) … has severely limited the choice of healthcare options available to many Americans and has produced large premium increases in many State individual markets for health insurance.”
The commander in chief went on to quote the numbers: “The average exchange premium in the 39 States that are using www.healthcare.gov in 2017 is more than double the average overall individual market premium recorded in 2013. The PPACA has also largely failed to provide meaningful choice or competition between insurers, resulting in one-third of America’s counties having only one insurer offering coverage on their applicable government-run exchange in 2017.”
The order calls to “expand the availability of and access to alternatives to expensive, mandate-laden PPACA insurance, including AHPs, STLDI, and HRAs.”
This was the precedent for the current proposal on extending time limitations on STLDI’s.
Who Will Benefit from the new Plan?
According to the Centers for Medicare and Medicaid Services (CMS), the policy may benefit individuals and families “between jobs of other sources of coverage,” those “who find ACA coverage too expensive or have seen their health insurance choices diminish,” and patients “whose doctors are not in network under ACA plans.”
They add, “Longer limited-duration plans would also reduce the risk of a gap in coverage for people with short-term coverage who become seriously ill while covered. Under current rules, a person who becomes ill would likely not qualify for another plan less than three months in duration because of the illness and would then need to wait without coverage until the next year to gain coverage in the individual market.”
The proposal, however, also has its fair share of critics. More on that in our upcoming post.
What are your thoughts on short-term healthcare?
Please share in the comments below.