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August 2 2018

Many Customers Will Welcome Short-Term, (Really) Affordable Health Insurance Plans

by Charlotte Hays

There has been a huge and utterly predictable outcry over the Trump administration's move to ensure that cheaper health insurance policies are available to the appropriate customers.

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

This is pure politics, It overlooks the nature of the plans: they are short-term plans, not for everybody (this is not the plan you would purchase if you have a pre-existing condition), and they fill a niche.

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.  For example, a single female past childbearing age would not have to pay for a policy that includes maternity care.

No one will be compelled to accept this kind of policy as her policy. But it will become an option--and a welcome one for a certain kind of customer. Since these plans are considerably more affordable, more people will be able to insure against medical catastrophes. The  editors of the Wall Street journal explain:

The costs of the new plans will be set in the marketplace, but without ObamaCare’s mandates they will be cheaper. A short-term plan ran about $124 a month on average in the last quarter of 2016, while an unsubsidized ObamaCare plan averaged $393.

By one count 161,000 people were enrolled in short-term options at the end of 2016, though this is a low estimate. The Administration predicts some 600,000 people will sign up next year, roughly 100,000 of whom were previously uninsured. The market could grow to 1.6 million over time. Combine this with the four million who may sign up for an association health plan under another recent Trump rule change, and the GOP may expand coverage considerably.

The real fear of critics of these plans is that they will give people an option other than the Affordable Care Act exchanges--and, if there is such an option, people will use it and harm the exchanges. However, since nearly nine in ten ObamaCare enrollees are eligible for subsidies, according to the editorial, they will make the choice to remain with ObamaCare.

The editorial concludes:

Republicans failed to repeal and replace ObamaCare, so its costs have continued to rise, and now Democrats want to blame the GOP for increases that are baked into the health law’s faulty design. Democrats want to prop up ObamaCare no matter the cost, but the goal of government policy should be to support a system that offers consumers the choice of coverage that best works for them. The fact that so many Americans are looking for alternatives to ObamaCare should tell you which plans are really “junk.”

These short-term, affordable policies are exactly what a lot of citizens have wanted.

Independent Women's Forum is an educational 501(c)(3) dedicated to developing and advancing policies that aren’t just well intended, but actually enhance people’s freedom, choices, and opportunities. IWF is the sister organization of the Independent Women’s Voice.​
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