Short‐​Term Plans Rule Flips the Political Narrative on Health‐​Insurance Protections

The usual narrative is that Democrats support consumer protections and Republicans oppose them. Today’s short‐​term plans final rule flips that narrative: Republicans are expanding consumer protections, and Democrats are opposing them.


Today’s rule reverses a 2016 Obama rule. The Obama rule reduced consumer protections in short‐​term plans by exposing sick patients to medical underwriting. Before that rule, consumers could purchase short‐​term plans that lasted 12 months. If they developed a serious illness, their plan could cover them until the next ObamaCare open enrollment period, when they could purchase coverage without medical underwriting. The Obama rule restricted short‐​term plans to 3 months. It prohibited “renewal guarantees” that protect enrollees who fall ill from medical underwriting when they purchased a new short‐​term plan. As a result, the Obama rule left short‐​term plan enrollees who got sick with no coverage for up to 9 months: those who purchased a plan in January, and developed a serious illness in February, would lose their coverage at the end of March, and have no coverage until the following January. (Source: NAIC) This was by design: the Obama administration wanted to expose sick people in short‐​term plans to medical underwriting and lost coverage as a way of forcing consumers to buy ObamaCare coverage instead. That’s at least a little messed up.


Today’s rule allows short‐​term plans to last 12 months and offer renewal guarantees. It therefore allows short‐​term plans to protect the sick from medical underwriting for an additional 9 months — indeed, “issuers may offer coverage under a short‐​term, limited‐​duration insurance policy for up to a total of 36 months, without any medical underwriting or experience rating beyond that completed upon the initial sale of the policy” — and allows renewal guarantees to protect them from medical underwriting indefinitely. Protecting the sick from medical underwriting has long been a goal of Congress.


So, to recap, Republicans are expanding consumer protections, and Democrats are opposing an expansion of consumer protections.


Weird, isn’t it?