Study: Short-Term Health Plans 80 Percent Cheaper than Obamacare

A doctor speaks with a patient about her high blood pressure, or hypertension, on September 5, 2012 in Berlin, Germany. Doctors in the country are demanding higher payments from health insurance companies (Krankenkassen).
Adam Berry/Getty Images

A Foundation for Government Accountability (FGA) study released on Thursday found that short-term health plans could cost 80 percent less than Obamacare “bronze” plans.

In October 2018, thanks to executive orders signed by President Donald Trump, millions of Americans gained increased access to short-term health insurance, which serves as a less expensive option compared to plans purchased through the Affordable Care Act, also known as Obamacare.

Short-term plans allow for Americans to keep their plans for up to 364 days and to renew their plans for up to three years. Because short-term plans do not have to comply with many Obamacare insurance regulations, insurance companies can offer more customized and cheaper plans compared to the individual market.

One study from eHealth, an online health insurance broker that sells short-term plans, found that many short-term plans could cost 80 percent less than the lowest-cost Obamacare “bronze” plan and could even cost 93 percent less in some states.

Another analysis from Agile Health Insurance, one of the country’s top short-term health plan brokers, found that short-term plans cost roughly 60 percent less than individual market plans.

The analysis found that in some markets, such as Denver, Colorado, the gap between between short-term and individual market plans was even higher. For instance, a 40-year-old, non-smoking woman would have to pay $484.47 per month on the individual health insurance plan, whereas on the short-term health insurance plan, she would only have to pay $199.93 per month.

Short-term plans have an additional benefit because, unlike Obamacare and individual market plans, consumers can purchase short-term plans at any time. In contrast, Americans must sign up for Obamacare during a relatively short enrollment period in the fall. Short-term plans offer an important protection for Americans who may lose their jobs — and subsequently their health insurance plans — because they can then easily purchase a short-term plan.

Further, Americans who are healthy, young, and do not use a doctor very often can purchase low-cost, short-term plans once they are no longer eligible for their parents’ health insurance plans.

Despite Obamacare’s drive to help millions of Americans obtain health insurance, nearly 30 million citizens are still lacking in coverage. FGA has suggested that short-term plans could help alleviate that problem.

The Center for Health and Economy found that roughly 3 million Americans will purchase short-term health insurance plans, which include 2.5 million who currently do not have health insurance.

FGA concluded its study by contending that states could reduce barriers for consumers to purchase more affordable health insurance through short-term plans.

Several states such as Maryland, Delaware, California, and Washington have implemented rules to prohibit insurers from issuing short-term plans for longer than three months. Other states have also issued rules to block short-term plans’ renewabilities.

FGA said that consumers should have access to more affordable health insurance options.

FGA wrote:

By choosing this path, policymakers will be unleashing new options that cost less than half the cost of the average individual market plan, and they will be increasing options for uninsured Americans who have been priced out of the market, bringing much-needed relief.

When the president signed the executive order expanding Association Health Plans and short-term plans, Sen. Rand Paul (R-KY) praised the order as “the biggest free-market reform of health care in a generation.”

Sean Moran is a congressional reporter for Breitbart News. Follow him on Twitter @SeanMoran3.

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