Trump Administration Extends 'Short-Term' Health Plans To Three Years, Resolving Long-Standing Concern That Americans Were Buying Coverage Obligated To Pay Out When They Got Sick
WASHINGTON. The Trump administration on Wednesday finalized a rule expanding access to short-term, limited-duration health insurance, a category of plan distinguished by its freedom to refuse coverage for pre-existing conditions, decline to pay for prescription drugs, and exclude maternity care, mental health treatment, and substantial hospitalization, thereby resolving a long-standing concern that Americans shopping for insurance were at risk of accidentally purchasing some.
Under regulations issued during the Obama administration, such plans had been capped at three months, a limit the Department of Health and Human Services described as an obstacle to consumer choice. The new rule extends the plans to an initial term of just under twelve months and permits renewals stretching the arrangement to thirty-six months, a duration officials acknowledged was difficult to reconcile with the words "short" and "term" but said captured the spirit of the product, which remains temporary in the sense that it tends to end abruptly the moment a policyholder files a claim of any consequence.
"For too long, Americans have been forced into expensive plans loaded with benefits they may never use, like coverage for the illness they will eventually get," said one official, describing the plans as an affordable option for healthy people, a population the administration defined as anyone not currently exhibiting symptoms. The official noted that the plans would be especially valuable to younger consumers, who would enjoy lower premiums right up until the moment they needed insurance, at which point they would enjoy a denial letter.
Insurers welcomed the rule, observing that short-term plans had historically been among the industry's most profitable products precisely because they collected premiums without the countervailing expense of paying for care. Analysts projected that the expansion would draw healthy customers out of the regulated marketplaces, raising premiums for the older and sicker Americans left behind, an outcome the administration characterized as those Americans at last being asked to bear the true cost of having conditions.
The President, who had spent the previous eighteen months attempting to repeal the Affordable Care Act through Congress and failing, hailed the rule as proof that the law could also be dismantled without Congress, a body he praised for its newfound irrelevance to the process. Brokers, who earn commissions on short-term plans far exceeding those on comprehensive coverage, prepared marketing materials emphasizing the plans' low monthly cost and de-emphasizing, in technical compliance with federal disclosure requirements, everything else.
At press time, a healthy 28-year-old who had purchased a short-term plan to save money was reviewing his policy's fine print in the waiting room of an emergency department, slowly arriving at a fuller understanding of the word "limited."