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.
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:
- New Jersey
- New York
- and others.
To learn whether your state prohibits the sale of short-term insurance plans, see What You Need to Know About Obamacare.
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.