How Trump’s radical tax, spending and policy bills will affect Medicaid
The House has passed President Donald Trump’s sweeping tax, spending and policy bills, and Medicaid is expected to be heavily affected.
With millions of people predicted to lose health insurance over the next decade, President Donald Trump’s administration appears to be ready to facilitate access to potentially inexpensive coverage.
The Department of Labor, Health and Human Services and Treasury said it would ease enforcement of Biden-era rules that restrict the use of a type of barebone health insurance known as short-term health insurance. Plans are usually inexpensive, but in many cases there is no protection for consumers who purchase their own health insurance.
Additionally, the three departments hope to draft new rules to consider changes to these insurance plans.
What is short-term health insurance?
Short-term insurance plans are often lower than affordable care methods plans, but come with catches. Insurance companies selling these plans do not offer all the robust benefits of an ACA plan. Also, unlike ACA plans, insurance companies can deny or limit coverage based on a person’s health.
However, some say these plans could appeal to healthy adults seeking cheap coverage as insurance costs rise and Affordable Care Acts are projected to rise and Affordable Care Acts are projected to leave 10 million people uninsured in the future, resulting in rising insurance costs and cutting down on Affordable Care Acts.
According to the CBO, if Congress makes the expired Covid-19 pandemic-era tax credits more affordable for consumers, an additional 4 million or more consumers could lose compensation.
With more people losing their insurance or no longer eligible for subsidized ACA plans, some people may “look at a comprehensive plan that offers at least some level of coverage,” says Michelle Long, senior policy manager for Patient and Consumer Protection at KFF, a health insurance nonprofit.
Will Trump expand his use of short-term plans again?
The Trump administration is once again taking steps to make these plans more accessible to insurers and consumers.
In a statement on August 7, the Department of Labor, Health, and Human Services and the Treasury said they “will not prioritize enforcement actions” on plans that do not meet the criteria of Biden-era regulations to ensure that short-term plans are restricted and businesses disclose service limits and cover the plans. The HHS will also “encourage states to adopt a similar approach,” reverting from enforcing the four-month limit on Biden’s short-term plan.
The three federal agencies also said they would draft new rules to change the definition of short-term plans and seek public comment. The agency did not provide a timeline as to when rules changes could be drafted.
White House spokesman Kush Desai said the Trump administration is “working to expand its affordable plans to increase health insurance options for Americans.”
“It’s an American interest to have more options and more competition in the insurance market,” Desai said.
Given that Trump previously allowed short-term plans to be extended by up to three years, “We generally expect us to be heading again,” said Justin Giovanneli, project director at the Center for Health Insurance Reform at Georgetown University’s Institute of Health Policy.
American Association of Ancillary Benefits, an industry group representing short-term health insurance companies, sued HHS in US District Court in Texas, attempting to suspend Biden’s 2024 rules. A federal judge ordered the case to be maintained and responded to HHS by August 28th, detailing plans to issue new rules on short-term planning.
It is also unclear whether the state will choose to reduce enforcement of Biden’s short-term planning restrictions.
Idaho proposes relaxation rules for short-term planning. Other states, such as California and Colorado, have banned or restricted short-term planning.
Even if the Trump administration eases oversight of its short-term plans, insurance companies are likely to be cautious about drafting more tolerant rules and selling the plans until they are finally finalized, said Michael Cannon, the Libertarian Cato Institute’s health policy directory.
eHealth, the online insurance market, allows consumers to register compared to short-term plans. The Trump administration signaled plans to ease restrictions on these plans, but eHealth officials have urged consumers to pay attention.
Whitney Stidom, Vice President of Consumer Realization at Ehealth, should be aware that consumers are less comprehensive than ACA plans and do not have preventive services, mental health or coverage for existing conditions.
“While short-term health insurance plans are valuable to those who are in between work or need limited coverage, it’s important for individuals to understand the limitations of these options and make informed choices,” says Stidom.
Democrats and Republicans have different short-term plans
For almost a decade, the legal status of short-term health insurance plans has depended on who was in the White House.
In 2016, then-President Barack Obama completed the rules that took effect in 2017 that restricted short-term insurance plans to three months. The move comes three years after the Democratic Signature Affordable Care Act overhauled the health insurance market and sold minimal benefits such as prescription drug coverage, emergency situations and maternity care. Also, ACA’s plans prevent insurers from denying or limiting coverage based on a person’s medical history – common practices prior to 2014.
In 2018, the Trump administration eased restrictions on these short-term plans. The Republican president’s administration allowed consumers to purchase plans up to one year and renew their coverage for up to three years.
In 2019, according to the House of Representatives’ Oversight Report in June 2020, roughly 3 million consumers signed a short-term plan sold by nine insurance companies.
In 2024, the Biden administration enacted rules regarding short-term health insurance.
Are there any benefits to short-term planning?
Giovannelli said that if you earn too much to qualify for ACA plan subsidies in good health, short-term planning can be a viable option for consumers who are eligible for ACA plan subsidies.
An example would be someone who has been uninsured due to unemployment or another change in their living environment.
However, Giovannelli said these plans are more of a halt for consumers.
“If that’s not the case, selling that product as an alternative to comprehensive coverage is extremely dangerous,” Giovanneli said. “If you’re healthy, you’ll have lower costs for advance payments, but there are no rules for all the backend costs.”
These plans may include annual or lifetime coverage restrictions. Neither is permitted under the ACA plan.
Cannon said Biden’s four-month restrictions on these plans would harm people who get sick while covered. He said healthy people could theoretically stack these plans, buy one after another from different insurance companies, and maintain coverage. However, short-term health insurance companies can deny coverage based on a person’s medical history, so short-term insurance customers diagnosed with a new illness will not qualify for the new plan.
“The rules hurt people who get expensive illnesses and can’t buy another plan,” Cannon said.
North Carolina men cannot update their short-term plans
Charlotte, North Carolina resident Steve Swisegood purchased a short-term plan sold by UnitedHealthcare more than two years ago.
The 59-year-old said his insurance is a “terrifying plan” because it limits the number of doctor visits his family can make each year. He also has to pay more pockets for everyday items such as vaccinations and prescriptions.
However, the press worked for him. His insurance costs $900 a month to cover him, his wife, and his college son. The costs are primarily covered by his former employer, NBC News. NBCNews will pay a monthly scholarship to his health insurance as part of his early retirement benefits. He will forfeit your NBC insurance payment if he receives another full-time job or ACA health insurance subsidy.
He said if he chooses an ACA plan it would cost an additional $800 a month. His family is healthy and doesn’t visit doctors frequently, which makes him irritated. Even the limited coverage of his short-term plans, it works for his family. He doesn’t know what he will do when his plans expire at the end of the year.
“As a consumer, I don’t want to spend more money than I have to,” Swisgood said. “What really infuriates me is in Washington (DC) playing these political games. That’s obviously what happened with this kind of insurance.”
Email Consumer Health Reporter Ken Alltucker (alltuck@usatoday.com).
