Obamacare promised Americans affordable health insurance. The reality fell far short.
Now we have a way to let people save money on coverage and get back some of the freedom they lost. We can create an escape hatch for people to get out of Obamacare.
Last week, the Trump administration took steps to expand “short-term limited-duration” health plans. We should go even further.
These plans existed for people who experienced a break in coverage; they could have the plan for up to 364 days. The plans weren’t bound by all of the burdensome requirements of Obamacare, so they were less expensive than other insurance.
The Obama administration worried that people would ditch their Obamacare coverage in favor of these cheaper policies. So they chopped the duration to no more than 90 days and said people could not renew these policies. Because these plans technically did not meet the law’s definition of acceptable health insurance, anyone with this coverage owed an individual mandate penalty to the IRS.
But the tax law Republicans passed in December effectively repealed the individual mandate, thus restoring short-term plans as an option for many people.
The Trump administration approach brings back the previous rule that short-term plans can last up to 364 days. It’s a common-sense first step that Congress can move quickly to improve on and that will allow them to provide even more relief.
I have now drafted legislation that writes this time extension into law, so that no future administration can roll it back again. It also allows people to renew their plans without having to reapply.
This lets the plans fulfill another broken Obamacare promise: “If you like your plan, you can keep it.” In fact, Obamacare took away insurance plans from people who liked them. In 2013, 4.7 million Americans received cancellation notices. But now, people with short-term plans would not have to worry about getting a cancellation letter. They would be protected from their insurance company and from Washington.
With these two standards in place, many people will find short-term limited-duration plans a viable option free from Obamacare’s regulations. They can get coverage at lower cost if they don’t need all the bells and whistles of an Obamacare plan.
People will now have a right to choose, which was taken away by Obamacare. For a large number of healthy people, especially young people, it could be a very good choice.
Obamacare plans will still exist. So will subsidies for lower-income people to buy that coverage. States will still be free to regulate short-term plans. But President Trump is also supporting state innovation that gives people better choices.
Idaho has taken up the challenge. It has proposed allowing its state market to include plans that don’t follow all of the Obamacare mandates. Blue Cross of Idaho says being freed from just some of these burdens would allow it to offer policies at much better rates. Today, a family of four could pay $933 for an Obamacare bronze plan with a family deductible of $11,000. Under Idaho’s proposal, the same family can get a plan with a deductible of $8,000 and pay just $572 per month. It works out to savings of more than $4,300 per year.
Democrats know that Obamacare has caused prices to spike. Among states using the federal healthcare.gov exchange, average premiums have doubled since the law took effect in 2014. People living in more than half of America’s counties have only one choice of insurer in their Obamacare exchange. Middle-class families who don’t qualify for subsidies are being squeezed the hardest.
Obamacare plans have become so expensive that, according to Gallup, the number of uninsured people actually increased by three million last year. Democrats have responded by pushing for a complete government takeover of the health care system. Everyone would be forced into coverage that looks a lot like Medicaid.
Republicans know a better solution is to give Americans more options, not fewer. Let people choose the coverage that works best for them. One simple change to the law could give people back their choices and let them finally start to recover from the damage done by Obamacare.
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