Biden must not kill off short-term health plans

Biden must not kill off short-term health plans

Democratic lawmakers are looking to limit patient choice in the health insurance market.

Forty of them just sent a letter to the Biden administration urging regulators to undo a Trump-era rule that expanded access to short-term health plans. President Joe Biden is sympathetic to their pleas. He called short-term plans “junk” during his 2020 campaign. But his administration has yet to roll back Donald Trump’s rule.

That’s a good thing. Short-term plans are among the few affordable sources of insurance coverage available to people shopping on the individual market. The Trump administration understood that. In 2018, it extended the maximum duration of short-term plans from three months to just under a year. The rule also allowed insurers to renew patients’ coverage for up to three years.

Short-term plans aren’t bound by Obamacare’s cost-inflating mandates, which require policies to cover everyone regardless of health status or history and forbid insurers from charging the old any more than three times what they charge the young. The average short-term plan only costs about $120 per month — about one-fourth as much as the average exchange plan. So, it’s unsurprising that roughly 3 million people were enrolled in the plans as of 2019, the last year for which data are available.

That’s a problem, according to critics. They claim Trump’s expansion amounted to “Obamacare sabotage” — and lament that the cheaper plans siphon people away from the exchanges.

But rather than enacting meaningful reforms that could make Obamacare less costly, Democrats remain committed to banning alternatives. They’d prefer to coax people into the exchanges with lavish taxpayer subsidies. Even those who make more than four times the federal poverty level, more than $100,000 in income for a family of four, get federal assistance with their premiums now.

Patients deserve the freedom to choose the health plan that works best for them. Trump’s rule expanding access to short-term plans affords patients that choice — and should be viewed as an enduring health policy success.

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Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.