Trump proposal could push health premiums up by $2K for older Americans
A proposed federal rule would allow short-term health insurance plans to provide up to 364 days of coverage instead of the current three months.
Premiums for short-term coverage generally are lower than those for one-year plans through the Affordable Care Act marketplace because they are exempt from the law’s minimum-coverage mandates.
The AARP estimates that if the rule is a adopted, a 60-year-old who remains with ACA coverage would fork over anywhere from about $1,000 to $4,000 more for coverage in 2019.
A federal proposal to expand short-term health plans could mean older Americans with insurance through the Affordable Care Act will pay an average of $2,000 more in 2019 premiums, according to the AARP.
The rule proposal, issued jointly by several federal agencies last month due to a 2017 directive by President Trump, would allow short-term health-care policies to span 364 days instead of the current three months.
While federal officials say the intention is to provide more affordable coverage options, critics say the move — coupled with the recent elimination of a penalty for non-coverage starting in 2019 — could drive even more young and healthy consumers away from the ACA marketplace. Short-term plans come with limited coverage and are largely unavailable to people with health problems.
“It creates a situation where older Americans and people with pre-existing conditions are left in the ACA marketplace, and that would make their premiums go up,” said Megan O’Reilly, director of AARP’s federal health and family team.
Basically, if healthy people flock to these short-term policies, consumers covered by ACA-compliant plans would likely watch their premiums rise because the remaining pool of people would be more expensive for insurers to cover.
The Urban Institute estimates that the proposed rule, in combination with the elimination of a fine for not having health coverage, would increase premiums by an average of 16.4 percent in 2019, although it could be 20 percent or 21 percent in some states.
AARP, the nation’s largest advocate for older Americans, used 2018 marketplace premiums to calculate what that would mean for 60-year-olds who buy a silver plan — the second-lowest cost option — through an ACA exchange. Under that scenario, the average yearly premium increase would be $2,000, although the range would be about $1,000 to $4,000, depending on the state.