The Trump administration took new steps Tuesday to loosen health insurance rules, moving to allow the sale of more short-term health plans that do not need to offer consumers a full range of health protections.
The proposed regulations — which represent the latest in a series of administrative attacks on the Affordable Care Act since President Trump took office — could make cheaper and skimpier plans available to more Americans.
But these short-term plans — which could last up to a year under the Trump administration’s proposed new rules — also threaten to further weaken insurance markets around the country and drive up costs for sicker Americans who need health plans that offer a full set of benefits, such as prescription drugs, maternity care or mental health and substance abuse services.
That would erode the health law’s guarantee that access to insurance would no longer depend on a person’s health.
Trump administration officials billed the proposed new regulations as a step to make health insurance more affordable.
“Americans need more choices in health insurance so they can find coverage that meets their needs,” said Health and Human Services Secretary Alex Azar. “The status quo is failing too many Americans who face skyrocketing costs and fewer and fewer choices.”
Rising premiums have squeezed a growing number of consumers, particularly those who earn too much to qualify for government assistance through the healthcare law, often called Obamacare.
But the Trump administration’s new proposal is expected to generate widespread opposition from consumer advocates, patient groups and many physicians, who worry that looser insurance rules will leave patients without key protections and erode coverage for people who need it most.
“Young and healthy people could be tempted to purchase these low-premium plans with few benefits, while older and sicker people, like cancer patients, seeking more comprehensive health coverage could potentially be left struggling with rising premiums because of the market divide,” warned Chris Hansen, president of the advocacy arm of the American Cancer Society.
Among the other leading patient groups that condemned the proposed new rules are the American Heart Assn., the American Lung Assn., the Arthritis Foundation, Consumers Union, the Cystic Fibrosis Foundation, the Leukemia and Lymphoma Society and the March of Dimes.
The administration is already under fire for proposing last month to make it easier for self-employed Americans, small businesses and others to band together to get health insurance through what are called association health plans.
Association plans do not have to offer a comprehensive set of so-called essential health benefits, a key requirement of the 2010 health law.
Short-term plans, which were limited to three months under the Obama administration, would also be able to skirt the benefit requirements.
Importantly, these plans also could turn away sick consumers, another practice that was banned by the current health law, and they would not have to renew coverage for consumers that develop a medical condition.
That could ultimately split insurance markets in two, creating one cheaper market for healthy people and a second, more costly market for sick patients who need more extensive coverage.
Proposals last year by congressional Republicans to allow health insurers to offer slimmed-down benefits would have made coverage unaffordable for many consumers with preexisting medical conditions, according to multiple analyses by the nonpartisan Congressional Budget Office.
It is unclear how widespread these short-term plans might become and whether some states would try to curtail their use if they want to preserve insurance market protections.
The Trump administration estimates that fewer than 200,000 consumers would actually shift into these short-term plans, though other Americans who are uninsured may enroll in these plans, federal officials said.
Officials in some states that have aggressively implemented the Affordable Care Act, such as California, have expressed opposition to short-term plans, warning they would put insurance markets at risk.
At the state Capitol in Sacramento, the chairman of the Senate health committee has already introduced legislation to ban short-term plans in California. “Why would we want some kind of substandard, junk insurance to be sold here?” said Anthony Wright, head of Health Access California, a leading consumer advocate in the state.
In other places, however, state officials could move aggressively to promote skimpier health plans.
Idaho, for example, is already moving to allow health plans sold there to skirt the benefit requirements in the federal health law.
Testifying before lawmakers last week, Azar appeared to signal his discomfort with Idaho’s move, indicating that it was important that current law be followed.
But the new announcement on short-term insurance plans could effectively open a path for Idaho and other states to reach the same end: cheaper, less comprehensive coverage for healthy consumers.