The 21st century is a golden age of personalization. Whether it’s customizing our smart phones with our favorite apps or ordering exactly what we need when we need it from Amazon, we increasingly expect a unique customer experience, not a one-size-fits-all model.
So why shouldn’t the same principle apply to buying health insurance?
Since Obamacare was enacted, affordable, individualized health care coverage choices have all but disappeared for many Americans. Individual market premiums increased 105% in states using healthcare.gov from the year before Obamacare kicked in through the final year of the Obama administration.
That’s why President Trump has made it a priority to open up new options for health insurance for Americans, and issued an executive order to that effect in October. In particular, we need to be opening up more affordable alternatives to Affordable Care Act health insurance policies, which are becoming increasingly unaffordable for many.
In keeping with that direction, the Departments of Health and Human Services, Labor, and Treasury released a proposal this week to extend the availability of a more affordable, more individualized form of insurance, called short-term limited duration health insurance plans.
Obamacare imposed an unprecedented level of regulation and standardization on individual-market health insurance all across America. This has left many consumers in an intolerable predicament — in some cases, having to spend up to a third or even half of their income on premiums and deductibles before insurance kicks in. The cost of individual market health insurance has risen to such an extent that, increasingly, it only makes sense for those who are sick or may become sick soon.
Health coverage in the form of short-term limited duration plans has long been widely available to individuals in circumstances where they are unable to access traditional coverage, such as those between jobs or students taking a semester off from school. This type of coverage is in many cases relatively affordable, particularly today in comparison with the plans in the individual market, now having to abide by Obamacare regulations.
In late 2016, the Obama Administration severely curtailed access to these options by prohibiting anyone from purchasing short-term plans that last longer than three months. Under the Trump administration’s new proposal, customers will be able to buy plans up to 12 months in duration.
This proposal, combined with the repeal of the individual mandate tax, could benefit millions of middle-class families who can’t afford the premiums of Obamacare plans.
Short-term plans aren’t for everyone. They don’t satisfy some of the Obamacare mandates for insurance, such as requirements to cover certain health benefits.
But for Americans who have been priced out of Obamacare plans, who can’t find a plan that will cover their doctor, or who are looking for affordable coverage between jobs, these short-term plans could make a lot of sense.
This isn’t just about making sure individualized plans are available for Americans who need them. More broadly, this administration believes that a competitive, affordable insurance market is going to come about by allowing insurers to respond to consumers — not by imposing edicts from Washington.
Expanding options for more affordable, individualized insurance is one of President Trump’s key health care priorities, and one of our key priorities at Health and Human Services. This week’s proposal represents a significant step toward that goal, and a new affordable health care option for Americans who need it.