Trump Administration Clears The Way For Short-Term Health Policies

Aug 1, 2018
Originally published on August 1, 2018 10:46 am
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NOEL KING, HOST:

The Trump administration this morning is announcing some changes that will allow insurance companies to offer cheap policies - sounds like good news, but not entirely, because the plans won't cover as many services as those that are required under the Affordable Care Act. NPR's health policy correspondent Alison Kodjak is in studio with me now.

Good morning, Alison.

ALISON KODJAK, BYLINE: Good morning, Noel.

KING: All right. So cheap insurance sounds good. What exactly are these new rules that the administration has announced, and what do they do?

KODJAK: So these apply only to what are called short-term insurance policies. They - under the Affordable Care Act, these plans were limited to sort of bridge policies that people could by for three months, like if they lost their job or something. And so they're going to be less comprehensive than insurance sold under the Affordable Care Act exchanges that have to have a whole variety of benefits. And what the change is, is that you can now buy these policies for up to a year, and you can renew at least twice, and so you could have this kind of insurance for three years. So they're likely to be cheaper, and they're going to appeal to a certain kind - like, group of people, people who are healthy, who don't think they really need health insurance and maybe people who think that insurance under the Affordable Care Act plans is too expensive.

KING: Yeah. You could imagine people having that point of view. Like, look; you know, I'm going to be in a certain set of circumstances for the next couple months; I'll get something to tide myself over. And you're saying, but now it'll be three years that people can have these policies.

KODJAK: Right. Right. And so people who don't necessarily think they need a lot of care can buy these and just use these policies instead of buying insurance the way you were required to under the Affordable Care Act through the ACA exchanges. And the wild card is, if you do get sick, it may end up surprising you. This is what happened before the Affordable Care Act. People would think they had health insurance, and they wouldn't have read the fine print, and they might end up in the emergency room after a car accident and find out that being in the hospital isn't covered or their prescription drugs aren't covered if they suddenly have an illness that they didn't have beforehand. So under the Affordable Care Act, there's this variety of benefits. There's 10 broad categories that have to be included in those policies. That doesn't exist in these policies.

KING: So they're cheaper in part because they don't cover as much. They don't have those 10 broad categories. What will they cover?

KODJAK: Well, it's unclear. Each policy might be different. You could buy a policy that covers your doctor's appointments and doesn't cover your prescription drugs. You could buy a policy that you think covers a lot of things, but maybe it doesn't cover mental health care or pregnancy. Most of them in the past didn't cover maternity care. Or you might find that your policy only covers hospitalization. And so what - you know, under these new rules, also, the Trump administration is requiring that these plans have a lot of disclosure, and they're encouraging people to read them carefully. Even Trump administration officials are saying, these aren't for everybody.

KING: OK - so eliminate some of the surprise this time around. Will this hurt the Affordable Care Act markets?

KODJAK: Most economists say it won't draw too many people out of the markets because most people in those markets get subsidies, so they find the care affordable. And so the administration is estimating about 200,000 people might buy these policies next year.

KING: Not a huge number. NPR's health policy correspondent Alison Kodjak. Alison, thanks so much.

KODJAK: Thanks, Noel.

(SOUNDBITE OF KRUSSELDORF'S "REBOOT JAM") Transcript provided by NPR, Copyright NPR.

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