Obamacare Alternative Gains Speed

KEY TAKEAWAYS

• Short-term health insurance plans are proving to be an affordable alternative to Obamacare, with many being sold for half the cost of Obamacare plans.
• Most cost less than $200 a month, compared with an average $484 per month for Obamacare plans.
• It is estimated 4.3 million people will buy one of these plans – 1.7 million of whom have no insurance today. 

Short-term health insurance plans are being sold in many states for less than half the cost of Obamacare plans. According to a new report by the Foundation for Government Accountability, twice as many insurers are selling these plans, and they are offering eight times as many coverage options to American consumers. In the majority of states, short-term plans are being sold for less than $200 per month due to the deregulation of short-term health insurance. The average Obamacare plan in the individual market, by contrast, would cost $484 per month. Americans no longer face the individual mandate tax penalty, and they have access to coverage they actually want and can afford.

Short-Term Plans Offer an Affordable Alternative to Obamacare

Short-term plans – usually available for up to one year at a time – have been around for decades. They were popular with people who didn’t need long-term policies, like when they were between jobs. These plans do not need to comply with Obamacare’s burdensome insurance regulations so they are much more affordable.

In the final days of the Obama administration, officials issued regulations that reduced the plans’ maximum length from one year to just 90 days. The change was designed to drive people away from short-term plans and to increase enrollment in Obamacare.

Recognizing that Americans needed not just an escape from Obamacare but also affordable alternatives, the Trump administration reversed course. In August, the administration eliminated the Obama-era regulation. It made short-term plans available for up to one year and renewable for up to 36 months. This deregulation ensures that consumers are protected by requiring insurers to clearly inform people about the limits of the coverage they are purchasing. It also maintains states’ authority to regulate the plans to best meet the needs of their citizens.

Premiums for Short-Term Plans Cheaper Than Obamacare in Many States

how do these plans compare?

After years of being let down by Obamacare, millions of Americans now have substantially more access to affordable coverage that meets their health care needs. According to the FGA report, numerous short-term plans are now available as a result of the rule change. There are twice as many insurers offering short-term plans in state markets, on average, compared to the number of insurers in the Obamacare marketplace. These insurers are offering far more plan options from which to choose. The FGA says, “Those shopping in the short-term market will have eight times as many options available, with 160 plans being offered on average.”

Additionally, these plans won’t break the bank. On average, short-term coverage is available at less than half the price of Obamacare’s benchmark plan. Approximately 55 percent of these plans have premiums of less than $200 per month. In contrast, 0.2 percent of Obamacare plans will have premiums below $200 next year. The FGA notes, “federal data shows that nearly half of all federal exchange enrollees have no access to any plans that cost less than $400 per month.”  

keeping promises

Republicans have made bold moves to guarantee Americans have access to affordable health care coverage that meets their needs. Each deregulatory step has protected health care access for the most vulnerable patients, while keeping in mind the people bearing the brunt of Obamacare regulations: Americans who receive no federal subsidies and pay the full Obamacare premium.

In stark contrast, Senate Democrats doubled down on Obamacare, attempting to ban access to short-term coverage and calling the plans “junk.” While these plans offer less-comprehensive coverage than an expensive Obamacare plan, they are an affordable and appropriate choice for many people. The liberal Urban Institute predicts that 4.3 million Americans will choose one of these plans next year – 1.7 million of whom have no insurance today – largely because of the plans’ affordability.

Americans have asked for alternatives to unaffordable Obamacare coverage. Short-term coverage is already proving to be a great option.