President Donald Trump has ordered his departments of Health and Human Services, Labor and the Treasury to issue a new rule allowing US consumers to buy short-term health insurance plans for a longer period of time.
“Under the Affordable Care Act, Americans have seen insurance premiums rise and choices dwindle,” said Health and Human Services Secretary Alex Azar. “President Trump is bringing more affordable insurance options back to the market, including through allowing the renewal of short-term plans. These plans aren’t for everyone, but they can provide a much more affordable option for millions of the forgotten men and women left out by the current system.”
The short-term healthcare coverage can now last up to 12 months during the initial period and then can be extended for up to 36 months in certain situations under the new rule. This change is apart of a broader directive released by President Trump in an executive order called “Promoting Healthcare Choice and Competition Across the United States” that he signed back in October 2017.
“We continue to see a crisis of affordability in the individual insurance market, especially for those who don’t qualify for large subsidies,” said Centers for Medicare & Medicaid Services (CMS) Seema Verma. “This final rule opens the door to new, more affordable coverage options for millions of middle-class Americans who have been priced out of ACA plans.”
Short-term health insurance has always been exempted from the Obamacare law since its inception. Because of the rising premiums that have come as a result of Obamacare, many individuals such as those who are between jobs or a student who just graduated college can fall between the cracks with no affordable healthcare options available. The expansion of the short-term healthcare law will give these consumers a much-needed option. Individuals who sign up for short-term health insurance could save up to half the money they would have otherwise spent on a non-subsidized plan under Obamacare, according to CMS estimates.
This is only the beginning of Trump’s comprehensive reforms to make the US healthcare system more market-based and less bureaucratic.
“The time has come to give Americans the freedom to purchase health insurance across state lines, which will create a truly competitive national marketplace that will bring costs way down and provide far better care,” Trump said.