Biden’s Short-Term Thinking

Mr. Blase compared states that allowed short-term plans to flourish with those that restricted them... The only states where individual market premiums have increased since 2018 are the five states that effectively prohibit short-term plans,” writes Mr. Blase... Mr. Blase notes short-term plans could be making other insurers more efficient in order to compete—and that it’s better for the health of the individual market if those who fall ill are covered by short-term plans instead of then switching to ACA plans.
WSJ Editorial Board

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The Biden team is combing the books for Trump policies to undo, and one target may be modest regulations expanding choices in health insurance. Democrats have attacked “short-term” health plans as “junk insurance,” but the evidence shows they’ve become a valuable option for millions of Americans.

A new paper from Brian Blase of the Galen Institute looks at how “short-term, limited duration” insurance plans have affected health-care markets since the Trump Administration expanded the option in 2018. These plans don’t have to offer the full suite of benefits required by the Affordable Care Act, and as such often cost a fraction of ACA plans.

The Obama Administration in 2016 capped plans at 90 days. The point was to force the young and healthy, who might otherwise be attracted to short-term plans, to pay more for coverage in the exchanges. The Trump Administration in 2018 reverted to the old standard of 364 days, with the option to renew for up to three years. …

Mr. Blase compared states that allowed short-term plans to flourish with those that restricted them; California, for instance, banned the plans. States “that permit short-term plans have lost fewer enrollees in the individual market, have had far more insurers offer coverage in the market, and have had larger premium reductions since the 2018 rule took effect. The only states where individual market premiums have increased since 2018 are the five states that effectively prohibit short-term plans,” writes Mr. Blase.

The short-term rule is one policy change among other market dynamics; the effects are difficult to disentangle. But there’s no evidence of “sabotage.” Mr. Blase notes short-term plans could be making other insurers more efficient in order to compete—and that it’s better for the health of the individual market if those who fall ill are covered by short-term plans instead of then switching to ACA plans…

Full article here

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