Find common ground on short-term health care

September 24, 2018

A recent survey by the left-leaning Urban Institute indicated that four in 10 American families struggle to afford food, healthcare, housing or utilities. If the results are accurate, they suggest a pattern of hardship underwriting the American Dream — and that’s an issue policymakers ought to tackle regardless of their political affiliation.

That’s why it’s so baffling that the Urban Institute counts itself among a chorus of organizations that champion affordability while simultaneously bashing the current administration’s attempts to correct the unaffordability of the Affordable Care Act by promoting short-term health care choices.

Currently, annual premiums for a single individual top $6,600, and families pay more than $18,000. Eighteen percent of families can’t pay their medical bills.

Yet groups like the Center for American Progress and Families USA have called solutions like the elimination of the individual mandate and the expansion of low-cost short-term health plans “sabotage” and “harmful to families.” They invoke imagery of patients with pre-existing conditions saddled with unaffordable premiums (as if that weren’t already the case under the Affordable Care Act) and gullible consumers being swindled by skimpy short-term insurance payouts.

Let’s cut the scare tactics. Recent changes to the Affordable Care Act — namely, expanding the length of short-term health plans from 3 months to 1 year — are helping the people who need help most.

We need not deal in hypotheticals to know how yearlong short-term plans will impact the public. Consider Robin Herman, a small business owner in California and mother of two, who switched to a short-term plan after rising ACA premiums became “just not affordable.” With a short-term plan, she paid just one quarter of the amount of her old monthly premiums.

Up until the Obama Administration capped these plans at three months to encourage healthy individuals to enroll in the federal healthcare exchange, yearlong short-term plans had been the norm since the 1970s.

For every demographic group who won’t benefit from short-term insurance expansion, such as those with pre-existing conditions, another subset of the population celebrates. These are individuals who earn at least $48,560, or families of four with a household income above $100,400. That income is hardly enough to get by in any of the nation’s major cities, but too much to qualify for a healthcare subsidy. They’re self-employed and part-time workers whose employers don’t offer coverage.

What’s more, under the Obama Administration’s three-month cap, people were forced to keep renewing their short-term plans. Aside from the administrative hassle, deductibles were also resetting every three months. Those who developed an illness during their three-month plan became ineligible to renew it, leaving them without coverage until open enrollment in the fall. Allowing these plans to last for one year helps patients in these situations access healthcare for a longer period, and that’s a very good thing.

In fact, the Congressional Budget Office estimates that 2 million Americans will take advantage of short-term plans. The estimate is in line with liberal organizations, which somehow argue that the Americans who are least able to pay for healthcare should continue subsidizing it for the rest of us.

Sure, fewer healthy people on the federal exchange might make premiums rise overall, but the Congressional Budget Office estimates any price increase to be in the order of merely 2 to 3 percent. That number is dwarfed by the 105 percent increase in premiums between 2013 (the year before the ACA went into effect) and 2017.

Short-term health insurance obviously isn’t right for everyone, but cheaper plans should at least be an option for those who need them.

Will Coggin is the director of research for the Center for Consumer Freedom in Washington, D.C., which describes itself as a nonprofit organization devoted to promoting personal responsibility and protecting consumer choices.

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