Expert: Short-Term Healthcare Plans Could Cost 90% Less than Obamacare

A medical doctor examines a patient with a stethoscope at a CCI Health and Wellness Services health center in Gaithersburg, Maryland, U.S., on Tuesday, April 18, 2017. After the failure of Republicans first attempt to repeal and replace the Affordable Care Act and President Donald Trumps subsequent threats to let …
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Michael Cannon, a Cato Institute health scholar, argued in a blog on Tuesday that President Donald Trump’s expansion of short-term health insurance plans could cost 90 percent less than Obamacare plans.

After Obamacare repeal failed in Congress, President Trump signed an executive order in October that expanded short-term limited-duration health insurance plans, which would offer Americans more affordable options compared to Obamacare.

Cannon then suggested that with renewal guarantees, health insurers could offer insurance plans that are 90 percent less expensive than Obamacare plans. Cannon said:

Allowing short-term plans to offer renewal guarantees would also free insurers to sell renewal guarantees as a stand-alone product–at a cost roughly 90 percent below that of ObamaCare plans. Insurers could market these products not only to the 50 million or so non-elderly people without employer-sponsored insurance.

In 2016, the Obama Health and Human Services (HHS) Department issued a regulation that limited Americans’ ability to access short-term healthcare plans.

Cannon noted:

In 2016, in an effort to force people into ObamaCare plans, the Obama HHS shortened the maximum duration for short-term plans from a year to three months and banned renewal guarantees.  The National Association of Insurance Commissioners complained this reduced consumer protections and exposed the sick to greater risk, including the risk of having no coverage.

Short-term limited-duration plans remain exempt from many Obamacare insurance regulations, making them a more affordable option for many Americans.

Breitbart News reported that the Congressional Budget Office (CBO) stated Obamacare premiums could spike by 15 percent in 2019.

Trump’s executive order would increase the original duration of a short-term plan to roughly one year and offer renewal guarantees to patients who get sick to keep paying the same premiums as healthy patients.

Cannon explained, “Both of these proposals are consumer protections that would protect the sick from medical underwriting and in some cases protect the sick from losing coverage entirely.”

“Democrats are literally trying to stop Republicans from expanding consumer protections because they would rather protect Obamacare,” the Cato scholar added.

He concluded, “If HHS acts swiftly to allow short-term plans to offer renewal guarantees, it can make affordable, secure health insurance options available right about when ObamaCare’s next round of premium hikes will hit consumers.”

Sen. Rand Paul (R-KY) praised President Trump’s executive order as “the biggest free-market reform of health care in a generation.”

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