"These policies are different from those offered on the exchange", said James Parker, a senior adviser for health reform at HHS, in a conference call with reporters.
Starting in October, insurers can sell individual-market short-term health plans lasting as long as 364 days, up from 90 days, and can renew them for a maximum total duration of 36 months; insurers will decide whether to screen enrollees for medical conditions at the time of renewal. Still, the fact that people with pre-existing conditions - which could be anything from acne to cancer - can be discriminated against or not have bills related to the condition covered will likely cause many people with health problems to avoid the new plans.
The policies were originally limited to three months, but they can now last up to a year, and be renewed to last as long as three years.
The Trump administration estimates that 200,000 Obamacare enrollees will move to short-term plans next year. The IHC Group is an organization of insurance carriers headquartered in Stamford, Conn.
The other ways they keep their premiums down is by offering bare-bones coverage in the first place. The administration says it expects about 1.6 million people to pick a short-term plan when the plans are fully phased in. They include more than 210,000 in Oregon. They can also deny coverage outright based on pre-existing conditions, refuse to cover any treatment for a pre-existing condition, or find ways to rescind your policy after you've incurred a claim.
Short-term plans can also set annual and lifetime caps on benefits, and cover few prescription drugs. Three-quarters of respondents to a recent Kaiser Family Foundation poll said it is "very important" that Obamacare's rule prohibiting insurers from denying coverage due to a person's medical history remains law, while almost that many feel the same way about banning insurers from charging sick people higher rates.
The complaint cites actions including making it easier for individuals and trade groups to purchase coverage outside the law's insurance markets; threatening to eliminate cost-sharing reduction payments; cutting funding for those who help individuals enroll in the program; and using federal funds Congress dedicated to implementing the law toward making videos criticizing it, NBC News reported. "This will make a low-priced option like short-term insurance even more attractive, particularly if insurers further adapt their benefits and conditions of coverage to better align with the needs of the unsubsidized population".
Short-term policies are available now, but consumers can only buy them for up to three months. Blue Cross and Blue Shield of North Carolina just announced it will cut Affordable Care Act premiums by 4 percent on average next year. But that lower cost comes with another price. The tax bill approved previous year by Congress stops this financial penalty as of 2019.More news: Trump ups pressure on China; demands 25% tariffs instead of 10%
Some in the industry say they're developing "next generation" short-term plans that will be more responsive to consumer needs, with pros and cons clearly spelled out.
"With the elimination of the fine in 2019 for people lacking Obamacare-compliant coverage, consumers will have only the premium of an Obamacare alternative to consider as opposed to the alternative's premium plus the expense of the fine", Coleman says.
Short-term plans have been around for decades, meant as a stopgap for job changers, students and others who found themselves without coverage.
However, these plans also don't have to adhere to all of Obamacare's rules, particularly the one requiring insurers to offer comprehensive coverage.
The short-term plan expansion is another step in Trump's plan to reshape the healthcare system without repealing Obamacare. The CMS projected that 600,000 people will buy the skinny coverage next year.
Brokers will likely be pushing the plans, as they often pay higher commissions than do ACA plans. "There are very important benefits that are included in the ACA and are not in short-term" plans. The plans have limits on coverage. The notices will say that these plans are not required to comply with Affordable Care Act requirements for health insurance and do not meet Obamacare's minimum essential coverage requirements, meaning policyholders may not be able to switch to a plan on the exchange outside of Obamacare's open enrollment period.
The Congressional Budget Office, the nonpartisan research office that estimates the budget effects of policy proposals, gave a larger figure, estimating that about 2 million mostly healthy people will buy short-term plans.