Judge Backs Non-ACA-Compliant Short-Term Health Plans

July 19, 2019 stgblase

By Stephanie Armour

WASHINGTON—The Trump administration can continue to move ahead with its expansion of certain health plans that don’t comply with the Affordable Care Act, under a decision Friday by a federal judge.

The ruling in Washington by U.S. District Judge Richard Leon dismissed a lawsuit by a plaintiff who had argued a Trump administration expansion of the so-called short-term health plans undermined the ACA. The plans are generally lower priced but can deny coverage based on consumers’ pre-existing health conditions. They also don’t have to cover the same benefits as ACA-compliant plans.

The plaintiff, the Association for Community Affiliated Plans, said it planned to appeal. “We remain firm in our contention that the Trump administration’s decision to expand dramatically the sale of junk insurance violates the Affordable Care Act and is arbitrary and capricious,” said Margaret A. Murray, chief executive of the trade group, which represents more than 60 health plans.

“The short-term rule was part of the Trump administration’s focus on increasing choices and promoting market competition,” said Brian Blase, a special assistant at the White House on health policy. “Judge Leon correctly indicated that the benefits of the rule far outweigh any costs.”

The Trump administration in August 2018 released a rule expanding access to the plans. Previously the plans could be carried for only 90 days. The rule allowed them to be carried for a year and renewed for total coverage of as long as 36 months.

Consumer-health advocates have said the Trump rule would drive up premiums on ACA exchanges because younger, healthier people may be drawn to buy short-term plans, siphoning them away from exchanges, where they help offset the cost of insuring older, sicker people.

The action on short-term plans was one of the most significant taken to date by the administration to undercut the ACA. A bigger threat is a suit from GOP-states that the administration is supporting.

The Fifth U.S. Circuit Court of Appeals heard oral arguments on the case this month. It stems from changes a Republican-led Congress made in 2017 to how the health law functions. The ACA, enacted in 2010, required most people to carry health coverage or pay a penalty, but the 2017 GOP action—part of its broader tax-overhaul package—reduced the penalty to $0, a move that practically eliminated the force of that mandate.

Texas and the other Republican plaintiffs argued that the ACA’s insurance mandate couldn’t be upheld under the Constitution if there was no financial penalty, because the Supreme Court previously upheld the mandate based on Congress’s taxing power.

The case may not be fully resolved until next year, placing health care at the center of the 2020 presidential campaign. An estimated 20 million people have gained coverage because of the ACA, and more than 100 million people with existing medical conditions could see their coverage lost or become more expensive if the law were struck down.


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