New rules from the Donald Trump administration that would allow cheaper less regulated health plans into the individual insurance market have alarmed healthcare providers, insurance companies and consumer groups.
Health groups are warning state regulators that the new regulations have flaws that could harm consumers and local markets. “We urge state insurance regulators to take action to protect consumers in your states,” the American Cancer Society Cancer Action Network, the American Heart Association, America’s Health Insurance Plans and other health groups wrote last week in a letter to state departments of insurance.
President Trump’s executive order, first announced in October, is designed to spur competition in the individual insurance market. The executive order comes after Trump and his fellow Republicans in Congress were unable to repeal the ACA, also known as Obamacare.
After several failed attempts to get rid of the ACA, the Trump administration instead is trying to make changes via executive order. It would, among other things ease rules to allow small businesses and other groups to band together to create “association health plans” that could form across state lines to offer coverage.
In addition, Trump wants “short-term, limited duration health plans” that may be cheaper but will cover less and attract healthy, younger purchasers away from individual health plans with richer benefits. By siphoning off healthier Americans to cheap plans Trump wants, those sold on public exchanges under the Affordable Care Act could become more expensive if a higher concentration of older and sick patients are enrolled.
“Expanding and extending short-term, limited-duration health plans, increasing enrollment in association health plans (AHPs), and relaxing rules for employer health reimbursement arrangements (HRAs) all increase adverse selection in insurance markets that serve millions of individuals and employers,” the health groups wrote to insurance regulators.
Given such concerns, it’s unclear if there will be any insurance carriers that want to sell Trump’s plans , which likely wouldn’t be available to buy until late next year for 2019 at the earliest. And analysts worry those policies that do reach the market won’t provide adequate benefits.
Industry analysts say consumers should be leery of these new policies and proposed rules.
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