Earlier this month, the Trump administration took another step toward restoring healthcare freedom for Americans across the country.
On August 1, the Departments of Health and Human Services, Labor and Treasury issued a final rule on short term, limited duration health plans, which will allow families and individuals to purchase these plans for 12 months with a total of 36 months of renewability.
These plans are exempt from Obamacare’s costly mandates and regulations and so the new rule has the potential to provide an off ramp for families that have seen higher prices and reduced access under Obamacare.
Once in effect, this will reverse an Obama-era policy that limited short term plans to three months with no option to renew, a decision which deprived millions of Americans access to a more flexible and affordable healthcare option.
More importantly, the Trump administration’s new rule comes at a crucial time when millions of Americans are facing increasing premiums and diminishing options in the individual insurance market.
Today, over 52 percent of American counties have one Obamacare provider, forcing individuals and families to choose between expensive healthcare plans or nothing.
Those that do have insurance are being priced out due rising premium costs of almost 200 percent for some, especially middle-class families that are often ineligible for subsidies. In 2017, enrollment in the individual market without subsidies dropped by 21 percent, while premiums rose 20 percent.
Limited duration plans are also expected to be 50 to 80 percent cheaper than current Obamacare plans, with some estimating that more than two million Americans who are currently uninsured may choose these plans due to their flexibility and affordability.
There are multiple cases in which short-term, limited duration insurance policies could be important to families. They can provide coverage for those who are in between jobs, transitioning between plans or in between coverage, can be used by middle-class families that do not have access to subsidized Obamacare plans, and can be used by students who are taking time off from school.
While this is a significant step toward enacting patient-centered healthcare, the expansion of short-term limited duration health plans is just one of many steps taken by President Trump to expand access and choice to Americans.
The Trump tax cut repealed the Obamacare individual mandate tax penalty which forced individuals to purchase government approved health insurance or pay a fine totaling almost $700 for an individual and $2,000 for a family. This tax is also highly regressive – of the 6.6 million Americans impacted, over 80 percent made less than $50,000.
The administration has also proposed a sweeping plan to reduce drug prices and promote innovation that would strengthen free market tools that exist in Medicare Part D, create stronger incentives to lower costs, and ensure foreign governments are no longer allowed to freeload off American medical innovation.
Expanding access to short-term, limited duration insurance is yet another example of President Trump delivering on his promise to provide Americans with more access to more affordable and flexible access to healthcare.