Trump health chief defends short-term insurance plans

President Trump’s goal of expanding short-term health plans will not harm the insurance marketplace, Health and Human Services (HHS) Secretary Alex Azar said Thursday.

Under questioning from Senate Democrats during a hearing on the HHS budget, Azar repeatedly defended a proposed rule from the administration that would allow the sale of short-term health plans for up to an entire year.

The plans skirt ObamaCare rules about coverage requirements, so while they will be cheaper, they will not be required to cover pre-existing conditions. They also don’t have to cover the law’s essential health benefits, such as maternity care, mental health or prescription drugs.{mosads}

Democrats argue the proposal will result in steep premium increases, as healthy people will buy into the short-term plans and leave the ObamaCare individual market.

Azar told lawmakers the administration’s plan is simply returning to a status quo that was only recently changed. Current law says the short-term plans can only be sold for three months, but that rule only took effect in 2017.

“These short term plans are the same ones the Obama administration had for eight years,” Azar said. He emphasized that the short-term plans “may not be the right option for everybody” but noted that for some individuals, “it may be better than nothing.”

Short-term plans historically have higher out of pocket costs than plans on ObamaCare exchanges, but lower monthly costs.

Azar said the administration won’t require any coverage guarantees from the short-term plans.

“If we start making them the equivalent of the Affordable Care Act, we’ll end up with the same pricing regime” and the problem of unaffordable insurance won’t be solved, Azar said.

Now that the GOP tax law has repealed the individual mandate penalty, insurance experts and Democrats say there’s no incentive for young, healthy people to stay in the individual market. That will leave only the sickest and oldest people left in the market, and insurers will be forced to either massively raise their rates or leave the market completely.

Azar said he doesn’t think that will happen, because ObamaCare subsidies designed to make plans more affordable will keep people from leaving.

“People are not going to be leaving subsidized insurance” for short-term plans, Azar said.

Insurers in Maryland and Virginia have already requested double-digit premium hikes for their ObamaCare plans in 2019, and some plans have said Trump administration policies are making the risk pool sicker.