Updated Mar 8, 2018

New GOP push: bill that would split individual market

Some Republicans are pushing to further expand short-term health plans. (Photo: Saul Loeb / AFP / Getty Images)

A bill pending on Capitol Hill would move the individual market another step further towards having separate, parallel marketplaces for sick and healthy people. A legislative push – which appears to be backed by some in the White House – would allow short-term plans to both be available for up to a year and to have guaranteed renewability.

Why it matters: While it's unclear how much of an impact this would have beyond what the Trump administration has already proposed, the bill shows that thought's being given to the legal parameters of what the administration can do. It would go a step further in undermining the structure of the Affordable Care Act than the administration has, with the added benefit of taking potential legal trouble off the table.

What the bill, which was introduced by Sen. John Barrasso, does:

  • Redefines short-term plans as lasting up to 364 days, which the administration has already proposed.
  • Gives applicants the option of selecting plans with "guaranteed renewability," which means that the plan wouldn't be allowed to drop the enrollee at the end of the coverage period. Of course, it could still raise premiums, especially if the enrollee became more expensive to cover.
"A short-term plan that’s renewable is frankly not a short-term plan. It’s sort of semantic gymnastics at that point. But, that’s not the point here. The point is to create an unregulated market that can make an end run around the ACA."
— Larry Levitt of the Kaiser Family Foundation

Our thought bubble: Something like this doesn't have much chance of passing Congress, even if it's packaged into other must-pass legislation. But it could complicate ACA market stabilization efforts, which conservatives are very uncomfortable with.

A description of the bill sent to Axios makes it clear that the point of the legislation is to sort individual market enrollees based on health status:

  • "This policy change would essentially create two parallel markets. The ACA market would still accept everyone and rate policies without regard for risk. This would make it most attractive to unhealthy and lower-income people receiving subsidies."
  • "The new short-term policies would offer coverage that was non-compliant but a much cheaper option, making them attractive to healthier and younger people who find the ACA policies too expensive."
  • Critics say that this will drive up premiums for sick people, effectively undermining the ACA's protections for people with pre-existing conditions.

Between the lines: From a policy standpoint, it's hard to say how much of an impact this bill would have on the marketplace. The administration has already proposed expanded access to short-term plans on its own.

  • "I assume the idea is that short-term plans become more attractive to consumers if renewable. They essentially just become skinny plans that can be renewed for multiple terms," said Tim Jost, a law professor emeritus at Washington and Lee and an ACA supporter.
  • But it's an open question as to how many people the renewability aspect would attract that wouldn't otherwise choose a short-term plan.

Yes, but: The description of the bill also clearly states its purpose is to keep future administrations from reverting back to a narrower definition of short-term plans. And there are additional legal advantages to passing a bill.

  • "That would immunize the Administration’s administrative proposal against legal challenges and prevent a future Administration from reverting to a more sensible definition of 'short-term'” plans," said Brooking's Matthew Fiedler. "That would be a very big deal."
  • It also indicates that the Trump administration has defined a limit on its ability to expand access to non ACA-compliant insurance plans. "The reason these short-term plans are exempt from the ACA’s rules is because they are of limited duration, meaning they’re not renewable," Levitt said. "The fact that the White House is floating Congressional action suggests they don’t think they can do it administratively. "

Go deeper

In photos: Authorities issue warning as Americans venture out for Memorial Day weekend

Venice Beach in Los Angeles on May 24. Photo: David McNew/Getty Images

Authorities urged Americans to maintain social distancing and wear masks against the coronavirus amid reports of packed beaches and bars during the Memorial Day weekend.

Driving the news: Law enforcement stepped up beach patrols, authorities on Florida's Gulf Coast closed parking lots because they were full and there were crowded scenes at Lake of the Ozarks bars in Missouri, per AP, which reports a shooting injured several people at a packed Daytona Beach in Florida.

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of 9:30 p.m. ET: 5,405,029 — Total deaths: 344,997 — Total recoveries — 2,168,408Map.
  2. U.S.: Total confirmed cases as of 9:30 p.m. ET: 1,642,021 — Total deaths: 97,698 — Total recoveries: 366,736 — Total tested: 14,163,195Map.
  3. World: White House announces travel restrictions on Brazil, coronavirus hotspot in Southern Hemisphere Over 100 coronavirus cases in Germany tied to single day of church services — Boris Johnson backs top aide amid reports that he broke U.K. lockdown while exhibiting symptoms.
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  5. Economy: White House economic adviser Kevin Hassett says it's possible the unemployment rate could still be in double digits by November's election — Public employees brace for layoffs.
  6. Federal government: Trump attacks a Columbia University study that suggests earlier lockdown could have saved 36,000 American lives.
  7. What should I do? Hydroxychloroquine questions answeredTraveling, asthma, dishes, disinfectants and being contagiousMasks, lending books and self-isolatingExercise, laundry, what counts as soap — Pets, moving and personal healthAnswers about the virus from Axios expertsWhat to know about social distancingHow to minimize your risk.
  8. Other resources: CDC on how to avoid the virus, what to do if you get it, the right mask to wear.

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Updated 1 hour ago - Politics & Policy

Republicans sue California over mail-out ballot plan

California Gov. Gavin Newsom during a February news conference in Sacramento, California. Photo: Justin Sullivan/Getty Images

President Trump accused Democrats of trying "Rig" November's general election as Republican groups filed a lawsuit against California Sunday in an attempt to stop Gov. Gavin Newsom (D) from mailing ballots to all registered voters.

Driving the news: Newsom signed an executive order this month in response to the coronavirus pandemic ensuring that all registered voters in the state receive a mail-in ballot.