If you thought yesterday’s expansion of “short-term” health plans seemed especially controversial, even within the bounds of a debate we’re all very used to, you were right.
The big picture: These new rules challenge two fundamental parts of the Affordable Care Act: its minimum standards for what insurance has to cover; and its goal of making those guarantees work by pulling in a mix of healthy people.
What they're saying: Democrats accused the Trump administration of “sabotaging” the ACA.
HHS Secretary Alex Azar said he had no desire to undermine the ACA, only to provide an affordable option for healthy people already driven out of the exchanges by rising premiums.
"The Affordable Care Act is sabotaging itself."— HHS Secretary Alex Azar
Either way, you end up at the same place: The Trump administration, unlike its predecessor, is not trying to find or create a better mix of healthy and sick people within the exchanges.
- Instead, it’s relegating the ACA’s markets to the sickest and poorest consumers, and supporting a parallel market for people who don’t think they will need much coverage.
Winners: UnitedHealthcare, which is the biggest provider of short-term plans in the country, and brokers like eHealth, whose stock was up more than 9% yesterday.
- United’s short-term plans paid out 44% of their premium revenues last year for medical care. ACA plans have to pay out at least 80%.
Losers: People in the individual market who have pre-existing conditions or who need coverage for services like prescription drugs, but who make too much money to qualify for financial assistance under the ACA.
What’s next: States can still impose additional regulations on short-term plans, and some of them surely will. That could include tighter limits on how long the policies can last, or benefit requirements.