President Donald Trump issued a directive to increase the duration of short-term health care plans from three months to 364 days. As a result, older Americans paying their premiums through the Affordable Care Act will incur an additional $2,000 in their 2019 premiums. According to the federal officials, the move was aimed at ensuring that people had access to more affordable coverage options. However, the critics say that the recent directive combined with the elimination of the penalty issued for non-coverage will lead to the withdrawal from ACA marketplace. The short-term health coverage plans are limited and are unavailable for people with health issues.
The directive gives rise to a situation where the older Americans and people ailing from pre-existing conditions will remain in the ACA marketplace. As a result, the premiums will rise. Additionally, the directive means that healthy people will jump into the short-term policies. The insurances will find it hard to cover the flock in the short-term plans. As a result, they will raise the premium rates for the members in the ACA marketplace. It’s expected that the federal directive will lead to an increase of the rates to around 16.4 percent in 2019. In some states, the rates will rise to 21 percent.
AARP, calculated the premiums payable in 2019 using the 2018 marketplace premiums. A 60-year-old with a silver plan would incur an additional $2,000 in annual premiums. However, the range would fluctuate between $1,000- $4,000 depending on the state. Short-term health plans came to address coverage issues for people who were in job crisis or other sources of coverage. As such, the programs are exempt from other consumer protections. They may not cover pre-existing conditions, prescription coverage, and mental health needs. The short-term coverage plans are adjustable. They can, therefore, charge an older person more or deny coverage depending on age. Most of them impose lifetime caps on coverage.
Statistics made public by the AARP show that 40 percent of people aged between 50 and 64 have a pre-existing condition. Once they hit 65, their eligibility for Medicare matures. As a result, their likelihood of qualifying for a short-term loan diminishes. Exempt from ACA mandates make the short-term plans affordable to those with the capacity to acquire them. Federal data show that the monthly premium rate for a short-term loan in 2016 was $124 while the yearly plans meeting ACA requirements were $393. Adopting the rule would return health care to pre-ACA days.