Biden To Undo Obamacare Alternatives

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Biden To Undo Obamacare Alternatives

Published: Thursday, January 21st, 2021 @ 2:01 am
By: John Locke Foundation ( More Entries )

Publisher's Note: This post appears here courtesy of the John Locke Foundation. The author of this post is Mitch Kokai.

David Hogberg writes for the Washington Examiner about the new president's plan to reverse recent health care reforms.

As the Biden administration looks to make its mark on healthcare, one policy it is likely to overturn is President Trump's 2018 executive order loosening rules for short-term health insurance policies, an effort to provide alternatives to Obamacare plans that Democrats described as sabotage.

While such policies account for a small part of the health insurance market, it is likely indicative of healthcare policy battles to come during the Biden administration, pitting liberal groups who want to defend and build upon Obamacare against conservative groups who want more free-market alternatives.

Also known as short-term, limited-duration insurance, it is health insurance that primarily fills the gaps in coverage that an individual may face when transitioning from one long-term plan to another, as may happen when a person is in between jobs.

Since such plans were supposed to offer only short-term coverage, they were not subject to the benefit mandates and other regulations under the Affordable Care Act. Fearing that healthier people were using such plans as a way to avoid paying higher prices on the ACA exchanges, in 2016, President Barack Obama issued an executive order saying that the plans could only offer three months of coverage and could not be renewed.

In 2018, Trump loosened those restrictions considerably, allowing short-term plans to offer coverage for up to one year and to be renewable for up to three years.

Short-term plans are not a large market. Jeff Smedsrud, CEO of Pivot Health, which sells short-term plans, estimates that about 700,000 people had such plans at any given point in time prior to the Trump executive order. After the order, he suggested, it grew to 900,000 to 1 million.

But that market could shrink under the Biden administration. Smedsrud thinks it's likely Biden will roll back the Trump rule.

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