Pres. Trump's short-term health plans are cheaper but cover less

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The Affordable Care Act required individual plans sold on and off the marketplace to cover a group of set benefits, including emergency, maternity and mental health care.

The policies will be available for 12 months at a time, up from a current limit of three, and customers will be able to renew them for additional years.

"There are many lawsuits and consumer complaints around the country stemming from unpaid bills" resulting from the short-term plans, Richard Besser, president of the Robert Wood Johnson Foundation, the biggest US health philanthropy, said in a letter to the administration opposing the expansion of the plans. Insurers will soon be allowed to sell these policies for just under a year.

Adversaries of the plans are calling them "junk insurance".

"The Affordable Care Act left about 28 million Americans without insurance even though it promised to provide affordable insurance to everybody, and for those who have it, premiums doubled over the course of President Obama's tenure", Azar said on CNBC on Wednesday.

But patient advocates and health policy experts argue that these policies provide only skimpy coverage and will undermine the Affordable Care Act. CMS said the average short-term plan cost $124 a month in 2016 versus roughly $400 a month for an Obamacare plan.

The plans, which have been available for years and were originally created to fill a temporary gap in coverage, will likely be cheaper than Obamacare policies.

Smedsrud said most plans restrict coverage for those who have sought treatment for a pre-existing condition over the past five years. What was your experience?

Short-term insurance policies go further than the association health plans in the ways they are exempt from parts of the 2010 health-care law that are meant to protect consumers from shoddy insurance that disadvantages consumers who need it most. None covered maternity care, slightly more than one-quarter had prescription drug coverage, and slightly more than half provided mental health benefits - although such benefits typically have limits. And, unlike Obamacare policies, they don't have to cap consumers' cost-sharing burden at $7,350 for 2018.

Instead, she's been stuck with surprise bills and mounting costs for services she thought the plan would cover but hasn't. In fact, some consumers with these plans have complained that they've been hit with unexpected expenses.

The Trump administration's recent freeze of payments to insurers with sicker customers is another swipe at Obamacare. This could have the effect of driving premiums slightly higher on the ACA exchanges, because healthier people will leave the market, according to the CBO.

With the three-month restriction on short-term plans, people's deductibles were reset every three months.

Azar said they're tailor-made for the "gig economy".

"We make no representation that it's equivalent coverage", said Jim Parker, a senior adviser at HHS. "These policies will not necessarily cover the same benefits or extend coverage to the same degree".

Aetna, however, urged the administration to impose certain consumer protections on the sale of the short-term plans, including allowing those that end in the middle of the calendar year to continue until the end of the year to allow people who have developed serious medical conditions to have coverage until the next ACA open-enrollment period.

These plans allow people to insure against the risk of catastrophic illnesses, the kinds that can bring financial ruin to a formerly healthy person, without all the bells and whistles-you won't have to insure for services you are unlikely to use. More short-term plans will be available starting this fall. Also, 300,000 people who now buy individual market polices outside of the Obamacare exchanges will switch to short-term plans and another 100,000 uninsured folks will purchase them next year. The market could grow to 1.6 million over time. What if they had the constant worry of how to pay for their insurance?

However, these plans also don't have to adhere to all of Obamacare's rules, particularly the one requiring insurers to offer comprehensive coverage.

The plans could also help lower deductibles for those who choose to buy them.

The goal was to ensure that everyone has access to quality health coverage without discriminating against those who have pre-existing medical conditions.

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