Short-term limited duration insurance plans offer affordable, quality health care coverage without harming people with pre-existing conditions on the Obamacare exchange
NEW YORK – Over the last decade, U.S. lawmakers have continued to look for ways to make health care coverage more affordable. Thanks to recent regulatory reforms that restored access to private, tailored health insurance plans, millions of uninsured and underinsured Americans now have the opportunity to purchase coverage that works for their budgets.
In a new report, Manhattan Institute Senior Fellow Chris Pope analyzes these yearlong, short-term limited duration insurance (STLDI) plans and finds that they provide equivalent insurance coverage at much lower premiums than Obamacare. Pope’s research also shows that expanding STLDI plans will not have a significant impact on premiums for those who remain on the Obamacare exchange.
According to Pope, the Affordable Care Act's subsidies are primarily responsible for supporting the guarantee of coverage to individuals with preexisting conditions. These subsidies automatically expand as necessary, so insurers can cover all who wish to enroll. So there is no need to force insurers to overprice coverage for enrollees who sign up before they get sick.
“If people want to purchase better insurance coverage, the government should not impede them from doing so,” said Pope. “Restricting affordable options for people who purchase plans before they get sick has not been an effective way to improve coverage for those who are already seriously ill.”
- For equivalent insurance protection, the premiums for STLDI plans are lower than premiums on the exchange—in some cases, almost half the cost.
- While narrow-network HMOs are often the only plans available through the ACA exchange, STLDI plans tend to be PPOs that offer broader access to providers.
- STLDI plans that cover all the ACA’s essential health benefits are widely available, with the sole exception of maternity services.
- Insurers estimate that STLDI deregulation will increase ACA exchange premiums for those who are ineligible for premium subsidies by an average of less than 1%.