Groups representing health insurers and consumers are urging state regulators to prevent the damage that could result from one of President Donald Trump’s executive orders.
The executive order in question is one that Trump signed in October, which directs federal agencies to expand and extend short-term health plans, increase enrollment in association health plans, and relax rules for employer-based health reimbursement arrangements.
“With these actions, we are moving toward lower costs and more options in the healthcare market, and taking crucial steps toward saving the American people from the nightmare of Obamacare,” Trump said at the time.
In practice, however, such policies could destabilize insurance markets that serve millions of individuals and employers, according to a letter from organizations including the Blue Cross Blue Shield Association, America’s Health Insurance Plans, the American Heart Association, March of Dimes and six others.
“We are concerned that this could create or expand alternative, parallel markets for health coverage, which would lead to higher premiums for consumers, particularly those with pre-existing conditions,” they wrote. “Further, these actions destabilize the health insurance markets that guarantee access to comprehensive health coverage regardless of health status.”
In order to protect consumers from potential harm related to changes in association health plan and health reimbursement arrangement rules, not only should states conduct ongoing monitoring of those products, but they should also require them to make “clear and accurate disclosures” to consumers about their risks, the letter said.
The organizations seemed most concerned, though, about the possibility of extending the duration of short-term plans, which aren’t subject to Affordable Care Act regulations like essential health benefits and guaranteed issue of coverage. The Obama administration limited the duration of these plans to three months, but Republicans sought to relax that rule even before Trump’s order, arguing that it would “restore individual choice in healthcare markets.”
Yet if a new federal rule allows such plans to be sold as a long-term alternative to regular policies, they will “attract healthier consumers away from the regular insurance risk pool and endanger people’s access to comprehensive coverage,” the groups said. Thus, they urged states to restore the duration limit themselves if the federal government makes such a move.
A recent analysis from the Robert Wood Johnson Foundation offered up additional ideas for states to counteract the expansion of short-term health plans. States could require such policies to comply with the ACA’s individual market rules and meet federal requirements on a minimum medical loss ratio, it suggested, and they could require insurers to price short-term plans to “reflect their true costs”—likely pushing their premiums higher.
The analysis also suggested that states closely watch those plans—for example, by tracking enrollment and reviewing insurance broker commissions—and require consumer education about short-term plans’ risks and limitations.