Fed­eral Judge Upholds Trump’s Cheap Health Insur­ance Plans

On July 19, a fed­eral judge in Wash­ing­ton, D.C. green-​lighted the Trump admin­is­tra­tion’s rule allow­ing the sale of short-​term health insur­ance poli­cies. The rule, which took effect last year, allows insur­ers to sell skele­ton health insur­ance plans that aren’t required to meet the stan­dards of the Afford­able Care Act (ACA). Short-​term plans can last for up to 12 months. Usu­ally, peo­ple can renew a short-​term plan for up to three years.

Dis­trict Judge Richard Leon found that the neg­a­tive impact of sell­ing short-​term health insur­ance plans is “min­i­mal.” His rul­ing nudges open the door to a larger num­ber of cheap health insur­ance plans that don’t cover pre-​existing con­di­tions or meet the other require­ments of Oba­macare plans.

Cheap Health Insur­ance: Not As Good As It Sounds

Besides elim­i­nat­ing impor­tant health care pro­tec­tions such as cov­er­age for pre-​existing con­di­tions and pre­scrip­tion drugs, a cen­tral con­cern is that a glut of inex­pen­sive short-​term plans could fun­nel health­ier peo­ple from the ACA mar­ket­places over time. This could even­tu­ally lead to higher pre­mi­ums for those who pur­chase plans under the Afford­able Care Act.

The law­suit was brought by the Asso­ci­a­tion for Com­mu­nity Affil­i­ated Plans (ACAP), and they intend to appeal the deci­sion. The case is another in a string of con­tin­u­ing efforts by Repub­li­cans to erase the ACA. Cur­rently, many eyes are also watch­ing a case, Texas v. United States, that could declare the ACA uncon­sti­tu­tional and lead to a land­slide of new health care headaches for Amer­i­cans.

That case is cur­rently pend­ing before the Fifth Cir­cuit Court of Appeals in Texas.

States That Restrict Short-​Term Insur­ance Plans

The new rul­ing won’t affect states that have passed their own laws restrict­ing the sale of short-​term plans, including:

• Cal­i­for­nia
• Col­orado
• Hawaii
• Mass­a­chu­setts
• New Jer­sey
• New York
• Ver­mont
• and oth­ers.

To learn whether your state pro­hibits the sale of short-​term insur­ance plans, see What You Need to Know About Oba­macare.

More Infor­ma­tion

To find out about the require­ments and pro­tec­tions of health insur­ance plans offered under the ACA, see What Do Oba­macare Health Plans Cover?

For infor­ma­tion about find­ing afford­able health insur­ance in your state, visit Legal Consumer’s Oba­macare learn­ing cen­ter.