The Democrat-controlled California legislature urged Gov. Jerry Brown on Tuesday to sign a ban on bargain-priced short-term health insurance plans sponsored by the Trump administration for being cheaper than Obamacare.
The legislature passed SB 910 on August 21 to prevent what the bill’s author, Sen. Edward Hernandez (D-Montebello), referred to in a tweet as “junk” healthcare. Hernandez urged Gov. Brown to sign the bill to prevent going back to a time when insured patients could be denied care and be forced into financial ruin.
The Trump administration rescinded a rule in late July issued during the Obama years that extended short-duration health insurance policies from three months to 364 days. Trump also allowed insurers the right to offer short-term health plans that are automatically renewable up to 3 years.
Obama restricted the term of short-term insurance, and required every adult to buy coverage, to force healthy young consumers to buy expensive Obamacare comprehensive policies to subsidize the cost of insurance for older and sicker consumers with pre-existing health conditions.
U.S. Department of Health and Human Services issued the new rule to offer an affordable option for limited coverage due to skyrocketing prices for Obamacare.
The Heritage Foundation’s Doug Badger said in a research paper that limited duration health plans “offer broader choices of providers and lower premiums for people in good health than Obamacare policies.” He added that that the short-term policies were “offering a lifeboat enabling them to escape Obamacare’s sinking ship.”
Covered California, the Golden State’s Obamacare exchange, announced in July that the cost of health coverage for 2019 would rise by 8.7 percent. Although that is over 4 times the 2 percent U.S. inflation rate in 2017, the spike in health insurance premiums for the state-run marketplace was 12.5 percent in 2017.
The 2018 healthcare monthly premium for a single consumer purchasing a mid-level Silver policy on Covered California’s exchange was about $400 in Southern California and $500 in Northern California. That compares to the advertised price for a short-term policy of $91 per month.
Currently there are only about 10,000 Californians that are enrolled in 90-day short-term healthcare plans, according to the San Francisco Chronicle. But with the Trump administration ending the “individual mandate” penalty for failing to buy health insurance equivalent to Obamacare, the number enrolling in short-term policies may spike higher.
California has the authority to regulate healthcare within its borders, but as the Sacramento Bee reported, it would be the first state to pass legislation specifically banning short-term healthcare policies.