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End partisan attacks on short-term health plans

House Democrats this week introduced legislation that would neuter short-term health plans. These policies don’t have to comply with Obamacare’s many cost-inflating mandates, so they’re less expensive than the plans available through the exchanges.

Democrats despise them. Energy and Commerce Committee Chairman Frank Pallone, D-N.J., has called them ” junk insurance.” But by declaring their opposition to short-term health plans, House Democrats are really stating they oppose efforts to make health coverage more affordable.

Obamacare-approved coverage is too expensive for millions of Americans because of its many mandates.

For one, conventional coverage must cover 10 “essential” benefits that aren’t essential for everyone, such as maternity care and substance abuse treatment. Obamacare also requires insurers to charge sick patients the same rates as healthy ones and caps premiums for the old at three times those for the young, even though claims costs for the old are five times those of the young.

Insurers have responded by hiking premiums. Between 2013 and 2017, average premiums for individual market plans doubled. In some states, they tripled.

To offer consumers some relief, the Trump administration issued a rule last August that allowed insurers to sell short-term plans that lasted up to 364 days and could be renewed for an additional two years. In 2016, the Obama administration had set short-term plans’ maximum duration at three months.

An analysis by Agile Health Insurance concluded that compared with bronze Obamacare plans, 30-year-old Americans could save about 80 percent in premiums with short-term plans. Fifty-year-olds could save about 70 percent.

Short-term plans will likely prove popular. The Congressional Budget Office expects about 2 million people to buy one by 2023.

Of course, they’re not for everyone. Short-term insurers do not have to accept all applicants. And they can charge the sick more than the healthy. So they’re not suitable for people with severe health problems.

But as Health and Human Services Secretary Alex Azar put it, “They can provide a much more affordable option for millions of the forgotten men and women left out by the current system.”

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.

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