Short-term health plans allowed by Trump come with a major caveat

Short-term health plans allowed by Trump come with a major caveat


JUDY WOODRUFF: Today, the Trump administration
took another step toward eliminating Obamacare by changing rules that will allow consumers
to buy cheaper, shorter-term health insurance. But, as Lisa Desjardins explains, there are
concerns that this move, set to take place this fall, may be harmful for people with
health problems and possibly left without enough health care coverage. LISA DESJARDINS: The president says there
needs to be more affordable insurance options than what’s available through the Obamacare
marketplaces now. The short-term plans will likely offer much
lower premiums, but insurers wouldn’t have to cover preexisting conditions or offer the
same benefits as required by the Affordable Care Act. Currently, people can only use short-term
coverage for three months. But the new rules would allow people to keep
those plans for a year and potentially renew them for a total of three years. Julie Appleby covers this for Kaiser Health
News and joins me now. Julie Appleby, let me just start off right
away. While the Trump administration says these
are good options for people, cheaper, opponents say they’re skimpy and risky. Just explain what these plans are. What do they do? JULIE APPLEBY, Kaiser Health News: Well, these
are short-term plans that are meant to be sort of a stopgap between — maybe you have
lost your job or you’re between jobs. You need some coverage for a little while. So they’re meant to be a stopgap. They have been around for a long time. They are, currently, as you mentioned, available
only up to 90 days. So you have to renew them every few months. The Trump administration is changing the rules
on that to make them available for up to a year. But what they are, basically, they have some
similarities to what we’re used to as job-based insurance, for example, but there are some
major differences. They’re less expensive. And the reason they’re less expensive is because
they cover a lot less. They can be choosy about who they pick. So if you are sick or have some kind of preexisting
condition, you might not even be able to buy one of these plans. LISA DESJARDINS: I was looking up, for example,
what, again, one of these plans might look like for me or someone like me. And the deductibles are huge. You would pay everything up to, say, $10,000,
but your premium is much less. Who would benefit from this? Who would be the winners of this change? JULIE APPLEBY: So, the folks that might find
these appealing are generally younger and healthier people, those folks who don’t have
a preexisting condition, because, remember, those folks aren’t going to be able to buy
these. So that might appeal to them. And it’s also folks who are struggling right
now to pay for an Affordable Care Act plan because they don’t get a subsidy. Remember, the Affordable Care Act provides
subsidies to people who earn up to about 400 percent of the poverty level, which is about
$48,000 for an individual. But if you don’t get a subsidy, some of the
premiums can be very expensive. So the Trump administration says, we want
to offer these plans. They are going to be lower-cost. But they do come with this caveat that they
cover a lot fewer things, and they may have very high deductibles. And the other thing, that these short-term
plans don’t have to follow a lot of the Affordable Care Act rules. So they could have annual or lifetime limits,
which are also barred in the Affordable Care Act plans. (CROSSTALK) LISA DESJARDINS: If you get a catastrophic
disease, for example. JULIE APPLEBY: Some of — some of the patient
advocacy groups, many of the patient advocacy groups are very concerned about these plans,
that people who are sick are going to perhaps buy them or become sick while they have one
and realize that they don’t cover a lot of things or that there are these high deductibles. LISA DESJARDINS: If you hit $500,000 of cancer
treatment, you may be on the hook for what’s left, for example. JULIE APPLEBY: Right. Some of them may have a limit of $250,000
a year in coverage or $2 million a year in coverage or that type of thing. So that’s where folks are really going to
have to read the fine print on these plans. The Trump administration in their new rule
that came out today said that they are going to require insurers to put sort of a little
box on their plan and say, these plans may not cover everything, read everything. It might not cover hospitalization. It might not cover emergency room care, and
to read the plans carefully before you purchase it. (CROSSTALK) LISA DESJARDINS: Risk warning for the — for
your insurance. JULIE APPLEBY: Right. LISA DESJARDINS: I want to talk about the
scope of this. This — let’s look at the numbers about short-term
plans. Right now, there are some, it looks like,
122,500 people who use these plans on the individual market. The White House has said in the last day that
they think this change will change that substantially to 600,000, almost five times as many, and
then, in three years, that will be almost more than 1.5 million people who use these
short-term plans. That’s a huge change for these plans. But what does that mean in terms of individual
markets? And how is this going to affect the health
of Obamacare? Because, obviously, this is the president
trying to go after the Affordable Care Act. JULIE APPLEBY: There’s been a number of estimates
on how many people would buy these plans. And I think until they come out and insurers
start offering and we see how many people sign up for them, it’s hard to say. The government does expect about 600,000 people
in the first year, in 2019. And they think, of those, about 200,000 of
them will come from the Affordable Care Act plan. These are folks who probably don’t get a subsidy. So they might jump to one of these. The concern is — and the government and other
estimates have shown that this will raise premiums for those folks who stay in the Affordable
Care Act, because it siphons out probably the younger and healthier folks. So, then the premiums may go up in the Affordable
Care Act marketplace. If you’re getting a subsidy, your subsidy
is also going to increase. So folks who get a subsidy may not see that
much of a difference. But the very people that are struggling to
buy coverage right now, those folks who are buying it on their own, and they don’t get
a subsidy, they may see a premium increase as a result. And some of them may not be able to buy one
of these short-term plans because they have a preexisting condition. LISA DESJARDINS: So, while this isn’t a huge
market itself, it will grow, and it could have a lot of ripple effects. JULIE APPLEBY: It could have some ripple effects. As you mentioned, there’s about 14 million
people in the plan — in the Affordable Care Act now; 200,000 of those leave, but, over
time, that could grow up quite a bit. LISA DESJARDINS: Julie Appleby with Kaiser
Health News, thank you very much. JULIE APPLEBY: Thank you.

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