State lawmakers in California are close to banning inexpensive, short-term health insurance plans backed by the Trump administration as a cheaper alternative to Obamacare.
State Sen. Ed Hernandez, D-Azusa, has urged California Gov. Jerry Brown, also a Democrat, to sign his legislation to ban the short-term health plans, which passed both houses of the Legislature.
Such coverage, used by about 10,000 Californians, is less expensive than Obamacare plans but doesn’t include “preventive care, essential health benefits, and protections for people with pre-existing conditions,” according to the San Francisco Chronicle.
“California is one step closer to banning junk health insurance,” Hernandez tweeted Aug. 22.
“This type of ‘care’ is dangerous,” the state lawmaker said. “I won’t let Californians go back to the days when we could be denied care completely or go into financial ruin. Ask Gov. Brown to sign #SB910 into law!”
Doug Badger, a visiting fellow in health policy at The Heritage Foundation, describes short-term health plans as “limited-duration insurance plans [that] provide many consumers with the choice of a policy they can afford—offering a lifeboat enabling them to escape Obamacare’s sinking ship.”
The plans, Badger said in a research paper, “offer broader choices of providers and lower premiums for people in good health than Obamacare policies.”
President Barack Obama’s administration permitted short-term insurance plans for three months, but the Trump administration lets insurers keep the plans for up to three years, The Sacramento Bee reported.
“These plans can bankrupt people,” Hernandez said. “They don’t have the protections of the Affordable Care Act. They’re junk. It’s a huge threat.”
States such as New York, New Jersey, and Massachusetts prohibit plans that do not comply with Obamacare, The Sacramento Bee reported, but California would be the first state to enact a law explicitly prohibiting the sale of short-term policies.
Sally Pipes, president, CEO, and Thomas W. Smith fellow in health care studies at the Pacific Research Institute, said in a statement provided to The Daily Signal that California would harm its citizens if it outlaws the plans.
“California lawmakers have been swayed by the hysteria raised by many Democratic politicians that short-term health plans are ‘junk’ plans,” Pipes said, adding:
They have taken steps to counteract the Trump administration’s new rule that they say is a way to ‘sabotage’ Obamacare’s exchanges. Governor Brown has until September 30 to sign the bill that passed the Senate and Assembly that would disallow the sale of short-term plans in the state.
They ignore the fact that over 2 million Californians are insured through the individual market and, next year, their premiums will jump nearly 9 percent.
Alex Azar, secretary of the U.S. Department of Health and Human Services, wrote in an August op-ed that short-term plans help alleviate the expense of Obamacare coverage:
These short-term plans can be a good option for many Americans priced out of Obamacare’s regulations—especially small-business owners, independent contractors in today’s ‘gig economy’ and younger Americans transitioning between school and employment.
Short-term plans are good for consumers, Azar said.
In his paper on the subject, Heritage’s Badger wrote:
Some have raised concerns about the possibility that short-term plans will pull healthy consumers out of the Obamacare exchanges, driving up premiums. But estimates from the Centers for Medicare & Medicaid Services actuary suggest any such premium increases would be minimal and would not affect subsidized consumers.
Fundamentally, this administration believes in more options, not fewer, for consumers. Expanding short-term insurance is just part of President Trump’s larger agenda to improve health-care choice and competition for Americans.
Marie Fishpaw, director of domestic policy studies at The Heritage Foundation’s Institute for Family, Community, and Opportunity, told The Daily Signal in an email that short-term plans are a needed alternative.
“The Trump administration recently restored an important coverage option for Americans who don’t want—or can’t afford—an Obamacare policy,” Fishpaw said, adding:
Under Obamacare, costs have soared while choices have fallen. The actions taken by the Trump administration are only a start at fixing these problems—so states and Congress need to embrace more solutions to improve choices and lower costs. It makes no sense to go in the opposite direction, as California’s bills would do, and reduce health choices.
