Short-term health plans: 10 things to know

The Trump administration on Wednesday finalized a rule expanding access to short-term health plans. The CMS projected that 600,000 people will buy the skinny coverage next year. Of those, 100,000 are currently uninsured, and 200,000 will switch from an Affordable Care Act plan. Outside analysts say that estimate is far too low. Because healthy people are most likely to bolt from the exchanges, expansion of short-term plans will increase federal spending on ACA premium subsidies by $28.2 billion over 10 years, the CMS estimated.

  1. Starting in October, insurers can sell individual-market short-term health plans lasting as long as 364 days, up from 90 days, and can renew them for a maximum total duration of 36 months; insurers will decide whether to screen enrollees for medical conditions at the time of renewal.
  2. The plans don’t have to comply with Affordable Care Act rules including: coverage of essential benefits; prohibition against medical underwriting; limits on premium variations based on age, sex or health status; elimination of annual and lifetime benefit caps; annual limits on out-of-pocket costs; and the requirement that plans spend no more than 20% of premiums on administrative costs and profit.

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