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The Week in Health Care: Trump Admin’s Short-Term Insurance Plans Mean Long-Term Pain

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April 24, 2018 12:13 p.m.

A new study out Monday morning from the Kaiser Family Foundation offers yet more proof of the threat the Trump administration’s short-term insurance rule poses to the country’s health-care markets. The rule allows healthier people to buy cheap, skimpy health-insurance plans, a policy that will drive up costs for sicker individuals who rely on comprehensive Obamacare plans to cover their medical needs. But Kaiser’s experts say even those who think they only need a bare-bones plan could find themselves deep in debt.

“Typical short-term policies do not cover maternity care, prescription drugs, mental health care, preventive care, and other essential benefits,” the report found. Additionally, “applicants with health conditions can be turned down or charged higher premiums, without limit, based on health status, gender, age, and other factors.” Furthermore, because the plans are not renewable, someone who becomes sick while enrolled could be shut out altogether after a single year.

The new report comes as the Trump administration wraps up the public comment period for its rule allowing these short-term plans to proliferate as a separate shadow market that will compete with Obamacare’s individual market. The Obama administration had limited use of these plans to just three months.

As we await the text of the final rule, even insurance industry lobby groups are asking the administration to slow down. “Short-term plans can provide an important temporary bridge for Americans who are transitioning between plans. But they are not a replacement for comprehensive coverage,” writes Matt Eyles, the new CEO of America’s Health Insurance Plans (AHIP), a health-insurance trade association.

Meanwhile, two Trump administration trends — hostility toward American Indian rights and a zeal for imposing Medicaid work requirements — are converging.

Several states, including Michigan and Tennessee, are rushing to join the three that have already won permission from HHS to implement the work requirements — potentially pushing hundreds of thousands of people off of Medicaid rolls.

American Indian tribes have argued that their members should be exempt, as they are citizens of sovereign nations. But even though HHS has long considered tribes sovereign — for example, they never had to comply with Obamacare’s individual mandate — the Trump administration is arguing that American Indians are a race, not citizens of a sovereign government, and that an exemption would be an illegal “racial preference.” This argument, which goes against hundreds of years of tribes’ having their own legal standing, was made by political appointees at HHS, and may result in a lawsuit. Tribal communities have some of the highest unemployment rates and faces some of the most serious health challenges in the country, including very high rates of addiction.

Meanwhile, Trump’s HHS is working to roll back protections for transgender patients, undoing an Obama-era executive order banning doctors, hospitals and health-insurance companies from discriminating against anyone due to their gender identity. While the effort may end up in the same place as the administration’s attempt to re-ban transgender people from the military — tied up in federal court — many fear the change could empower care providers to discriminate or deny treatment.

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