Trump’s Anti-Obamacare Insurance Plans Are Ripping People Off

Short-term health insurance plans spend a fraction of premiums on actual medical care.

President Donald Trump in October, 2017 signing an executive order "to promote healthcare choice and competition," including expanding the duration of short-term health insurance plansRon Sachs/Zuma

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The so-called “junk insurance” plans the Trump administration promotes may be helping insurance companies more than patients.

Short-term, limited-duration health insurance plans—Obamacare workarounds that do not have to comply to the Affordable Care Act—spend less than ACA-compliant plans on medical care, according to a data published last week in the National Association of Insurance Commissioner’s 2018 Accident and Health Policy Report, as Modern Healthcare reported.

For every dollar paid in premiums on UnitedHealthcare’s short-term health plans, 37 cents are spent on medical claims. At Cambia Health Solutions, just 9 percent of premium costs go to medical care. The rest of the money goes to administrative expenses or is kept as profit. On average, the report found that, among the five health insurers that earn the most in short-term insurance premiums, 39.2 percent of premiums were going to pay for patients’ medical care.

“Short-term health plans’ loss ratios are lower because they don’t cover nearly as many benefits,” Modern Healthcare writes. “Unlike Affordable Care Act-compliant plans, short-term plans can deny coverage to people with pre-existing health conditions and charge more based on health status. They are not required to and often don’t cover the 10 essential health benefits, including maternity care and prescription drugs.”

ACA-compliant plans are required to spend 80 percent of premiums on medical care. Essentially, Obamacare set a cap on the percentage of profit health insurance companies can make off premiums, forcing them to spend the vast majority of their funds on actual medical services. If an insurance company ends up charging higher premiums than that 80 percent rate, the insurers have to send out rebates.

President Donald Trump has promoted short-term health plans by extending their maximum duration from three months to a year, potentially making them more appealing for healthy individuals. While about 86,000 people were enrolled in these plans in 2018, according to the NAIC, the Centers for Medicare and Medicaid Services expects that more than 1.6 million people will have a short-term health plan by 2021 or 2022.

That means more money for insurance companies, and less for actual medical services.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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