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In the Trump administration, “short term” health insurance can last for 3 years

People can be denied coverage based on their medical history, and these plans don’t have to cover basic services.

President Donald Trump
President Donald Trump during the 2018 Made in America Product Showcase on July 23, 2018.
Alex Wong/Getty Images
Dylan Scott covers health care for Vox. He has reported on health policy for more than 10 years, writing for Governing magazine, Talking Points Memo and STAT before joining Vox in 2017.

The Trump administration finally finalized its new regulations expanding short-term health insurance on Wednesday, essentially recreating the pre-Obamacare insurance market while weakening the Affordable Care Act at the same time.

As we’ve covered before, these plans aren’t going to help Obamacare; if anything, they’re going to hurt it. Short-term limited-duration health insurance, previously limited to lasting just three months, is not required to comply with the law’s requirements around preexisting conditions or essential health benefits. People can be denied coverage based on their medical history, and these plans don’t have to cover basic services like prescription drugs.

The Trump administration projects that 200,000 or so Obamacare customers will switch from marketplace plans to short-term coverage in the coming year. They’ll probably be younger and healthier, drawn to the plans by their cheaper prices and because they don’t think they’ll need robust insurance. Actuaries expect that as a result, premiums for Obamacare plans will go up as much as 10 percent on average, unless states move to regulate the short-term plans more harshly than the Trump administration is willing to.

But there is another detail in the final regulations that almost plays like a joke: People who buy this short-term — key words — insurance will be allowed to renew those plans for up to 36 months.

In other words, there is nothing “short term” about them. That is just the legal loophole the Trump administration is using to bring back cheap, skimpy insurance plans after the Affordable Care Act tried to end them.

At the end of the Obama administration, regulators cut the allowable length of short-term insurance from 12 months to three. Now that Obamacare was in full effect, those plans would really be short-term, an option for people who were between jobs or looking for a new one — not a permanent source of health “insurance” for millions of Americans.

The Trump administration is reversing that and then some. Short-term plans can last a full year again (the length of any plan you buy on the ACA marketplace), and people will be allowed to renew their plan for three years. After that, they can apply again and then keep renewing for another three years.

Trump officials say they’re doing this because there are millions of Americans who can’t afford or at least won’t pay for Obamacare coverage. They think middle-class people who make too much money to receive federal assistance (the cutoff is $98,000 for a family of four) will welcome a cheaper alternative. So will the young and healthy who are betting they won’t need serious medical care in the next year.

But short-term insurance probably won’t work for the tens of millions of Americans with preexisting medical conditions, who could face explicit discrimination in that market.

Those populations do need some help under the status quo. One option, proposed by Democrats, is to provide more federal assistance to more people — not to mention their more ambitious health care ideas, like Medicare-for-all.

Republicans, who praised Trump’s action, are going the other way. They want to make cheaper, skimpier health insurance more widely available.

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