Are Short-Term Limited Duration Plans Bad For The Individual Market?

With the impasse in the congressional GOP’s attempts to repeal and replace the Affordable Care Act (ACA), the Trump administration has sought regulatory reforms that could improve health care choices and reduce costs for consumers. Among their options is the reversal of a recent regulation that sought to restrict the availability of short-term limited duration plans—insurance coverage exempted from the ACA’s regulations, which had previously been available for terms of up to one year. These plans have been criticized for offering poor value to consumers but also for appealing to enrollees who might otherwise select a plan on an exchange. The reality is that they more effectively meet the needs of healthier individuals and should be welcomed as potentially complementing the exchange instead of supplanting it. Three years after the ACA’s reforms to the individual market went into effect, with enrollment beginning in 2013, the $5,712 average annual exchange premium in 2016 dwarfs the $709 median health care costs incurred by Americans without Medicare or Medicaid in 2014. As a result, enrollment in 2016 was only 18 million—well behind pace to meet the 29 million initially projected by the Congressional Budget Office to be enrolled by 2019. On June 8, 14 senators wrote to Department of Health and Human Services (HHS) secretary Tom Price, calling on him to increase the availability of more attractively priced alternatives for the 27 million who remain uninsured. ...
Source: Health Affairs Blog - Category: Health Management Authors: Tags: Following the ACA Insurance and Coverage individual market repeal and replace short-term limited duration plans Source Type: blogs