Trump Administration Extends Length of Short-Term Health Plans

A final rule issued by the HHS has extended the length of limited, short-term health plans to 12 months, according to a press release.

Under the final rule, enrollees in short-term health plans can now also renew their short-term coverage plans for a total of 3 years. Previously, under the ACA short-term plans could only be enrolled in for a maximum of 3 months.

The Trump Administration hopes that these plans will offer Americans cheaper alternatives to ACA plans. CMS said that it expects up to 6 million people to enroll in short-term plans by 2022. CMS also said that they project plans will cost up to 80% less than ACA individual market plans. 

“Under the Affordable Care Act, Americans have seen insurance premiums rise and choices dwindle,” Alex Azar, secretary of the HHS said in the press release. “President Trump is bringing more affordable insurance options back to the market, including through allowing the renewal of short-term plans. These plans aren’t for everyone, but they can provide a much more affordable option for millions of the forgotten men and women left out by the current system.” 

However, critics of these short-term plans argue that the limited services offered under this type of coverage will not be adequate for the needs of most patients. 

“Short-term plans were designed to provide temporary insurance during gaps in coverage, such as when a person changes jobs,” the American College of Physcians said in a statement. “Because they were meant to be used for a limited time period, the plans are not required to meet many of the patient protections required by standard insurance regulations and known to improve health outcomes. Plans that are
not required to cover essential health benefits, not required to cover people with pre-existing health conditions, and that may place annual or lifetime limits on coverage are not providing the same access to care that comprehensive health insurance does.”

Further, due to the limited coverage offered under short-term plans, it is likely that enrollees will be healthier than those who enroll in ACA exchange plans. Critics argued that this will ultimately hurt patients across the country by causing premiums to increase for plans that offer more comprehensive coverage. 

“Limited plans to be used for up to years at a time will have implications beyond the one individual who chooses this option,” the ACP wrote. “This regulation will erode essential patient protections and drive up premiums for those buying coverage through the health insurance exchanges.”

—David Costill