Republican efforts to roll back the Affordable Care Act's insurance reforms continued Tuesday, when the Trump administration proposed regulations that would make it easier for health insurers to sell cheap, short-term policies that leave out key benefits and are available only to people in good health.
Announcement of the proposal, which has been in the works for several months, came two months after President Donald Trump signed Republican legislation eliminating the individual mandate, which makes people pay a financial penalty if they don't have insurance.
Taken together, the two steps ― getting rid of the mandate and then changing the rules on short-term plans ― could accelerate an evolution already underway for people buying insurance on their own, rather than through an employer.
In many states, premiums have risen substantially in the past few years, as plans have struggled to attract customers in relatively good health. Federal tax credits, which the Affordable Care Act also created, insulate low- and many middle-income people from these increases ― allowing them to get comprehensive coverage, regardless of medical status, at low prices.
But people at higher incomes receive no such assistance and, in some cases, the premiums make it difficult or even impossible for them to get traditional insurance. This is particularly true in more rural parts of the country, and especially for older consumers, thanks to a combination of factors ― some related to the design of the ACA, and some related to the way hostile Republican officials at the state and national level have implemented it.
The regulation that the administration proposed on Tuesday would make it easier for some of these people to get short-term plans, which are generally cheaper because they do not have to follow all of Obamacare's rules. They do not have to cover mental health and other "essential benefits," for example, and they can have annual or lifetime limits on the bills they will pay.
But short-term plans are generally not available to people with pre-existing conditions and wouldn't cover the expenses of people with some serious illnesses anyway. If short-term plans were to draw off a substantial number of relatively healthy customers, they would drive up the price of traditional, fully regulated insurance plans even more.
In the end, the new regulation could allow some people ― especially those who find current coverage unaffordable ― to buy ultra-cheap, relatively skimpy plans.
"It's time to offer more affordable coverage options," Seema Verma, administrator of the Centers for Medicare and Medicaid Services, said during a conference call Tuesday. "It's about allowing individuals, not the government, to make decisions about what works for them and their families."