WASHINGTON (Gray DC) -- The Trump administration is paving the way for more Americans to buy short-term health insurance plans this fall.
The White House says lifting Obama-era restrictions will offer more choice to consumers.
Health and Human Services Secretary Alex Azar says these pared-down plans could be 50 to 80 percent cheaper than ones currently offered through the Affordable Care Act.
"The bottom line for consumers is it's an opportunity to save money with access to more affordable health insurance, and that's what President Trump is delivering. He promised that he would try to bring more affordable health insurance to individuals, in spite of what the Affordable Care Act did by just jacking up premiums and reducing the options," said Azar.
Under the Obama administration, such short-term plans could only be kept for a few months, and now consumers can extend this coverage for up to three years. Azar says Americans working as independent contractors or transitioning between jobs may find these plans attractive.
Azar tells our Washington Reporter Alana Austin this is just one more option for Americans who keep seeing their premiums go up every year. In states like Alabama, Alaska and Oklahoma - for example - premiums tripled between 2013 and 2017.
“We’ve just fundamentally believe in the individual being smart enough to be in the driver’s seat and make their own choices. For too long now, we in Washington have said that bureaucrats and ivory-tower academics will tell you what you should buy…instead we’re saying the individual ought to be able to make that decision," said Azar.
But critics say these plans come at a cost. The Center for American Progress calls this 'junk insurance', saying the plans don’t do enough to protect those who get sick. The liberal think tanks predicts sky-rocketing expenses and further destabilize of the health insurance market.
"By proliferating the sale of junk insurance plans that exclude critical benefits and have higher out-of-pocket costs that many cannot afford, this rule will increase costs for consumers with health needs. But it’s not just consumers enrolled in these plans who could pay more—this rule will also increase premiums for middle-class families currently enrolled on the individual market. If Congress refuses to protect consumers, states must intervene to ban the sale of junk insurance," said Topher Spiro, vice president for health policy at the Center for American Progress.
Insurers should be able to start offering these plans within two months, all subject to state law. Azar cautions these simplified plans may not work for all Americans and consumers should carefully examine their options to determine what works best for them and their families.