Short-Term Health Insurance Expansion Finalized

Published September 12, 2018

The Trump administration is making short- term, limited duration health insurance plans carrying a longer renewal time available to consum ers, a move the administration says increases flex ibility and choice in the health care market.

The departments of Health and Human Services (HHS), Labor, and Treasury issued the final rule on August 1, fulfilling President Donald Trump’s promise to make affordable insurance outside of Obamacare available to more people. Trump had called for the rule in an executive order in February.

The rule will go into effect 60 days after being published in the Federal Register.

Short-term, limited duration health insurance is exempt from the rules on individual health insur- ance in the Affordable Care Act, popularly known as Obamacare, and is intended to fill coverage gaps when an individual is between jobs, a student is taking time off from school, or a family can’t afford an Obamacare plan. The plans were limited to three months and insurers could deny renewal. The new rule expands the limit to 12 months and makes the plans renewable for up to 36 months.

“This action will help increase choices for Ameri cans faced with escalating premiums and dwin dling options in the individual insurance market,” HHS stated in a press release announcing the rule change.

The rule is intended to address rising health insurance premiums and the simultaneous decrease in health plan purchases in the individual insurance market by people not receiving subsi– dies, the press release stated. The number of people enrolled in the individual market without subsidies dropped 20 percent nationally in 2017, the Centers for Medicare and Medicaid Services (CMS) reports. The average monthly premium for an individual in 2016 for a short-term, limited-duration policy was

approximately $124, whereas those with an unsub sidized individual market plan paid an average of $393.

“We continue to see a crisis of affordability in the individual insurance market, especially for those who don’t qualify for large subsidies,” said CMS Administrator Seema Verma in the statement announcing the new rule. “This final rule opens the door to new, more affordable coverage options for millions of middle-class Americans who have been priced out of ACA plans.”

—Staff reports