The Leaflet: A Big Win for Health Care Freedom

Published August 10, 2018

On August 1, the Trump administration issued a rule expanding the maximum period of short-term, limited-duration health insurance plans to 12 months. Further, the rule permits consumers to renew these short-term plans for a total of 36 months. This rule will provide millions of families with welcome relief from the Obama-era mandate that restricted short-term plans to just three months.

For many healthy people who are between jobs or can’t afford purchasing an expensive Obamacare insurance policy, the rule change, which will go into effect on October 1, is a significant move in the right direction. According to eHealth, 73 percent of health insurers plan to offer these short-term plans next year.

Short-term plans cost much less than all plans offered in Obamacare exchanges, in large part because they don’t cover many of the so-called “essential health benefits” mandated under the Affordable Care Act. Essential health benefits include prescription drugs, maternity care, and substance abuse treatment programs. Short-term plans aren’t intended to be all-encompassing insurance plans, but they do provide catastrophic coverage to those who can’t afford to buy more expensive policies or who are looking to buy insurance to cover gaps between jobs.

Not every American needs a complex, costly, comprehensive health insurance plan. Many Americans, especially young people, are healthy and don’t want or need unaffordable Obamacare insurance policies. In numerous states, Obamacare premiums have risen substantially in recent years. Since 2013, the average monthly premiums in 39 states doubled from $232 per month to $476 per month. This is why the Centers for Medicare and Medicaid Services are expecting roughly two million people to enroll in short-term plans by 2022.

Despite their significantly lower costs, several states oppose short-term insurance plans. Massachusetts, New Jersey, and New York have banned short-term health insurance plans. Other states are considering legislation to ban or limit the use of these plans. For example, Illinois lawmakers recently passed legislation that limits short-term plans to six months. If Illinois Gov. Bruce Rauner (R) takes no action by the end of August, this bill would become state law.

Fortunately, some states took initiative in crafting legislation favorable to the development and consumption of short-term health insurance plans. In Missouri, state Rep. Justin Hill (R) sponsored legislation earlier in January that would allow individuals to purchase renewable short-term plans lasting up to 12 months. The Heartland Institute did assist Hill by providing testimony in legislative hearings, writing op-eds, and publishing Research & Commentary articles in support of his bill. The Trump administration did reach out to Rep. Hill regarding the bill, incorporating its key provision (the 12-month plan duration) into the newly-issued federal rule.

The new federal rule is a major victory in the battle to increase health care freedom and a remarkable step toward providing millions of people with much cheaper health insurance options.


What We’re Working On

Budget & Tax
Tampa Ballpark Not Worth Its Potential $400 Million Taxpayer Price Tag
In this Research & Commentary, Senior Policy Analyst Matthew Glans writes about the proposed Major League Baseball stadium in Tampa, Florida. Glans argues that taxpayers will likely be footing a large portion of the bill. The official price tag for the long-anticipated stadium is $809 million, but other estimates say this number is conservative. Tampa Bay Rays owners have committed to contributing only $150 million to $400 million for stadium construction, so “[a]lthough team executives have not requested taxpayer funding yet, recent history shows taxpayers are often left holding the bill for stadium funding,” Glans wrote.

Health Care
The Judiciary Strikes a Blow Against Medicaid Reform
In this article, State Government Relations Manager Charlie Katebi writes about the recent decision by a U.S. District Court judge to block Kentucky Gov. Matt Bevin (R) from imposing work requirements for Medicaid recipients. The work requirements proposed by Bevin would only apply to abled-bodied adults and are intended to incentivize individuals to work and improve their quality of life. The Department of Health and Human Services advocates for work requirements, and numerous studies show work requirements improve physical and mental health, lengthens lifespans, and helps people move from dependency to self-sufficiency.

School Bullying Is a Good Start, But California Needs to Go Further
In this Research & Commentary, Policy Analyst Tim Benson discusses a California State Assembly bill that would allow interdistrict transfers for bullying victims in public schools. To qualify, a student and his or her parent would need to file a complaint with school officials or local law enforcement. Benson argues that although this bill is a good start to improving safety in schools, it does not go far enough. Numerous studies show that many students don’t feel comfortable speaking with school officials about bullying, so Benson suggests that instead of enacting this bill, California should institute Heartland’s Child Safety Account program proposal, a decision that would truly ensure safety in schools. 

Energy & Environment
Why Freezing Fuel-Economy Standards Is Good for Safety and Choice
In this edition of the Heartland Daily Podcast, Heartland Senior Fellow H. Sterling Burnett is joined by Marlo Lewis, senior fellow at the Competitive Enterprise Institute, to discuss how the Trump administration’s proposal to freeze federal fuel-economy standards after the year 2020 will help make vehicles affordable and promote better safety technology in new cars. They also discuss how Corporate Average Fuel Economy (CAFE) standards originally emerged, the standards’ failure to meet the original goals, and the unfortunate side effects these standards have imposed. 

From Our Free-Market Friends
Closing the Skills Gap
In this article by the Manhattan Institute, Milton Ezrati discusses the current lack of qualified job candidates possessing the skill sets needed to fill the more than 6.5 million unfilled jobs now available in the United States. Ezrati notes many skilled Baby Boomers are leaving the workforce, producing a litany of job openings. And although there has been a significant emphasis in recent years on college education, Ezrati argues pursuing higher education is not necessarily the right or most financially beneficial path for all students. The author also reports apprenticeships and job training have become increasingly scarce over the years, and he says the Trump administration is trying to fix this problem. Ezrati notes Trump has thus far “supported the expansion of apprenticeship programs and is now pressing legislation to increase access to technical education.”

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