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May 20 2019

What If "Junk" Health Insurance Isn't Junk?

by Charlotte Hays

That’s what Chris Pope of the Manhattan Institute finds in a study that shows that short-term health insurance policies, deplored by the Democrats, can be extremely beneficial to many consumers.

The Wall Street Journal has an excellent report on Pope’s findings, which come on the heels of a vote by Democrats in the House to end these policies. The Trump administration has allowed them.

Speaker Pelosi has claimed that these policies “discriminate” against people with pre-existing condition.

Pope took a look at Fulton County in Georgia. It is a county where the cost of buying ObamaCare is around the national average. Short-term insurance is available.

The cost of short-term insurance, as expected, is lower than ObamaCare plans. That’s the point, isn’t it? Still, the figures are worth comparing:   

A Blue Cross bronze ObamaCare plan—which covers about 60% of medical expenses—for a 30-year-old male who doesn’t smoke runs $296 a month in premiums. The plan carries a $5,200 deductible, with a maximum out-of-pocket cost of $7,900. UnitedHealthcare’s short-term plan that lasts 360 days? Monthly premium: $209, nearly 30% lower. The deductible and out-of-pocket caps are also lower, at $5,000 and $7,000, respectively.

The savings are greater for a more generous silver plan: $467 a month in premiums on the exchange versus $250 for a comparable short-term plan. Mr. Pope says that while “narrow-network HMOs are often the only plans available through the ACA exchange,” short-term plans “tend to be PPOs that offer broader access to providers.”

The range of services covered is narrower with short-term policies. As expected. But that is fine with the people who opt to purchase these policies. For example, a survey found that 80 percent of those who purchase these short-term policies want lower premiums rather than a larger array of services covered. Around 61 percent had considered ObamaCare policies before making their decisions.

Pope’s study found that the availability of short-term plans did not harm the ObamaCare exchanges, a favorite talking point:

Democrats predicted that the short-term rule would siphon patients from the exchanges and send premiums soaring, which hasn’t happened. Mr. Pope notes that Affordable Care Act premiums increased 3% on average for 2019, and that 92 of 124 requested rate increases didn’t even mention short-term insurance as a significant factor in higher rates. The effect on premiums has been negligible.

The bottom line:

Anyone with a tough medical condition and modest earnings will likely be better off on the exchanges, where coverage is generously subsidized. But plenty of Americans may conclude that short-term plans are better.?? The Democratic response to this individual choice? In the words of Senate Minority Leader Chuck Schumer: “Democrats will do everything in our power to stop this.”

In other words, the Democrats have a message: You should not get to decide how you want to buy health insurance.





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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