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Trump: Less Insurance, Lower Premiums  02/21 06:16

   WASHINGTON (AP) -- The Trump administration Tuesday spelled out a plan to 
lower the cost of health insurance: give consumers the option of buying less 
coverage in exchange for reduced premiums.

   The proposed regulations would expand an alternative to the comprehensive 
medical plans required under former President Barack Obama's health law. 
Individuals could buy so-called "short-term" policies for up to 12 months. But 
the coverage would omit key consumer protections and offer fewer benefits, 
making it unattractive for older people or those with health problems.

   The plans would come with a disclaimer that they don't meet the Affordable 
Care Act's safeguards, such as guaranteed coverage, ten broad classes of 
benefits, and limits on how much older adults have to pay. Insurers could also 
charge more if a consumer's medical history discloses health problems.

   Nonetheless, administration officials said they believe the short-term 
option will be welcomed by people who need an individual health insurance 
policy but don't qualify for the ACA's income-based subsidies.

   Those in this largely middle-class crowd make too much for subsidies and 
have absorbed years of price hikes. Some say they now face monthly, 
mortgage-size payments of well over $1,000 for health insurance. Then they 
usually have to pay a deductible of several thousand dollars. Research 
indicates the uninsured rate among these customers is growing.

   "If you are not subsidized, the options can be really unaffordable for 
folks," Health and Human Services Secretary Alex Azar told reporters. The 
administration estimates monthly premiums for a short-term plan could be about 
than one-third of what a comprehensive policy costs.

   Democrats swiftly branded it a return to "junk insurance," and the main 
insurance industry lobbying group said it was concerned the Trump plan could 
divide the healthy from the sick in the market and make it more expensive to 
cover those with health problems.

   Democrats say the solution is to increase government subsidies, so that more 
middle-class people will be eligible for taxpayer assistance to buy 
comprehensive coverage. The Obama administration had limited short-term plans 
to periods of no longer than three months, making them impractical for many 

   "We shouldn't be in the business of providing people with worse care," said 
Sam Berger, a former Obama aide now with the liberal Center for American 
Progress. "What we should be focusing on is finding ways of reducing the cost 
of high-quality care."

   Trump administration officials reject the notion that they're trying to 
undermine the ACA. Instead, they say they are trying to make things more 
workable for people who are not being helped by the health law.

   The administration estimates that only about 100,000 to 200,000 people will 
drop coverage they now have under the ACA and switch to cheaper short-term 
policies. They also say they expect short-term plans could attract many people 
among the estimated 28 million who remain uninsured.

   "What we see right now is that there are healthy people sitting on the 
sidelines without coverage, and this is an opportunity to provide them with 
coverage," said Seema Verma, head of the Centers for Medicare and Medicaid 
Services, which also administers the Obama-era health law.

   A government economic analysis that accompanied the proposal forecast a 
moderate increase in premiums among customers sticking with their ACA plans 
through HealthCare.gov. Because subsidies are tied to the cost of premiums, 
taxpayers would end up spending more.

   Administration officials said there's no final decision on whether consumers 
will have a legal right to renew coverage under one of the new short-term plans.

   One major health insurance company, United Healthcare, is already 
positioning itself to market short-term plans.

   But others in the industry see them as a niche product for people in life 
transitions, like being in-between jobs, moving to another state, or retiring 
before Medicare kicks in.

   "I certainly wouldn't recommend them to someone receiving a significant 
subsidy or who has ongoing health issues, but there are certain times and 
certain places where it makes sense," said Jeff Smedsrud, an insurance 
entrepreneur whose companies sell short-term plans.

   Consumer advocates say customers should read the fine print carefully to 
make sure the plan will cover their expected bills.

   The administration's proposal will be open for public comment for 60 days. 
Plans would be on the market later this year.

   However, short-term coverage won't count as qualifying coverage under the 
Obama health law for 2018.  That means consumers with such plans would legally 
be considered uninsured, putting them at risk of fines. That wouldn't be a 
problem next year, when repeal of the ACA requirement that most Americans have 
coverage takes effect.

   Tuesday's proposal follows another administration regulation that would 
allow groups to offer "association" health plans also exempt from ACA 
requirements to small businesses and sole proprietors. Having failed to repeal 
"Obamacare," Trump is now chipping away at it through regulations and waivers.

   The plan doesn't affect people with job-based coverage, still the mainstay 
for workers and their families.


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