The Trump administration recently announced a regulatory change that “proposes to expand the availability of short-term, limited-duration health insurance by allowing consumers to buy plans providing coverage for any period of less than 12 months, rather than the current (Obamacare) maximum period of less than three months.”
Naturally, California lawmakers are “resisting.” No one is going to have more options on their watch.
With the average Obamacare exchange premium having doubled in the first four years of the program, and growing 30 percent between 2017 and 2018, short-term plans are an affordable option for many. They are about one-third the cost of premiums in Covered California and other state exchanges.
Unlike Obamacare, the short-term plans won’t carry costly coverage for some benefits such as maternity care, newborn care, prescription drugs, substance-abuse treatment, pediatric dentistry, and pre-existing conditions. Short-term plans make sense for those who need nothing more than catastrophic coverage and are financially pressed to pay the exorbitant Obamacare premiums for benefits they’ll never use.
They are a good fit, as well, for those who object on freedom of religion grounds to the requirement that Obamacare exchange plans carry birth-control coverage. As Michael Cannon of the Cato Institute has noted, the plans give those with strong convictions – both those in the individual market and those who might want to leave employer plans due to their birth control benefits – the “full freedom to purchase secure health insurance without violating their religious beliefs.”
Due to their affordability, short-term insurance would also increase the number of insured Californians. (Wasn’t making sure that everyone was insured one of the excuses Washington used to force Obamacare on the country?) KPBS reported earlier this year that “Anthem Blue Cross officials said short-term plans could be a good option for people who are between jobs.” The Commonwealth Fund estimates that by 2020, short-term plans would increase the number of uninsured by as many as 2.2 million, while the Center for Health and Economy estimates that another 2.3 million will insured by then.
The additional coverage should please those who believe universal coverage is a policy goal, especially since Obamacare’s individual mandate has been repealed. Instead, lawmakers in some states have set about to kill them. In California, Senate Bill 910 would prohibit Californians from buying or renewing any health insurance plan that has an expiration date “that is less than 12 months after the original effective date of the coverage.” The bill is now on Gov. Jerry Brown’s desk, awaiting his signature or veto.
Democratic Sen. Ed Hernandez, SB 910’s author, who calls the short-term plans “junk insurance,” railed in a written statement that “Trump’s team continues to do everything possible to destabilize our insurance market and compromise the healthcare of millions of Californians, but I won’t let that happen.”
So, limiting options stabilizes “our insurance market” and will protect “the healthcare of millions of Californians”? These claims, of course, won’t hold up to the lightest scrutiny.
It’s interesting that Hernandez also called short-term plans “an affront to the basic principles of the Affordable Care Act.” Apparently, this means that it’s OK to offend freedom of choice if Obamacare’s “basic principles” are protected from insult. This is the Lewis Carroll behind-the-looking-glass world that California has fallen into.
What the opponents of short-term plans fear is the loss of the young and healthy from Obamacare exchanges, causing premiums for those in the exchanges, who are older and often in poorer health, to increase. The exchanges have fallen far short of the coverage pool that was expected, though. Five years ago, the Congressional Budget Office projected that enrollment in the Obamacare exchanges would reach 27 million. Yet far fewer than half, only 12 million, were enrolled by 2018. It should be no surprise that some organizations, such as the California Association of Health Underwriters argue that SB 910 “would remove a critical tool for coverage,” according to California Healthline.
Consequently, Obamacare’s most bitter defenders must use legislative power to force Americans into the exchanges to make up for failed policy. They seem not to care that a 2006 HealthAffairs study found that “purchasers derive value from having the range of choices that the individual market offers.” It’s their way or no way.
The Urban Institute says roughly 620,000 Californians would opt for short-term plans given the choice. The state, though, is little more than a governor’s signature away from stealing that choice from them. California is arguably the most “progressive” state in the country, but as is always the case with “progressive” public policy, this isn’t progress at all.
Kerry Jackson is a fellow with the Center for California Reform at the Pacific Research Institute.
