If finalized, a HHS proposal to allow coverage in short-term health plans for up to 364 days likely won’t in itself destroy the ACA individual market exchange. The proposal aims to increase insurance options for individuals who are “unable or unwilling” to purchase ACA-compliant plans.
While some experts see potential advantages in the rule that may help individuals bridge gaps between exchange open enrollment periods, others think it will do harm as people might choose cheaper health plans without the ACA’s protection and benefits.
“It would allow issuers to create something that looks more like a long-term policy than is currently possible,” Jason Karcher at the Milwaukee office of Milliman, Inc., says. “I can’t see how this would help the individual market because if anything, because of underwriting, it would take some healthy people out. On the other hand, I don’t know that it will take enough lives out of the individual market to really, truly harm it [more so] than the repeal of the mandate would do on its own.”
He also notes that much of what happens after the rule is finalized depends on how states react. They could choose to add more customer protections on the short-term plans or ban them, while having the chance to change parameters.
HHS said an estimated 3 million people will drop exchange coverage in 2019 after the individual mandate ends and predicts that roughly 100,000 to 200,000 additional individuals will shift to short-term insurance products.
Raj Bal at Demystify Healthcare LLC questions HHS’s estimate. “To me, that [100,000 to 200,000] is a very low number. I wouldn’t be surprised if over time it was several times that estimate. Depending on what the final rules are, it could be more than a million.”
For some customers, this is “skating on thin ice,” according to Deborah Chollet, senior fellow at Mathematica Policy Research. Some individuals may have to remain uninsured for a substantial period of time if they are removed from short-term plans as unhealthy, due to the shortened enrollment window for exchange plans.