Our editorial: More health insurance options welcome

The Detroit News

Congress and President Donald Trump couldn’t pass a full repeal of Obamacare. But GOP lawmakers managed to repeal the individual mandate through tax reform, paving the way for Trump to allow reasonable alternatives to the Obamacare exchanges.

The Trump administration announced it will bring back a rule that former President Obama had suspended which allows people to purchase short-term insurance plans. They can last up to 364 days, and would be liberated from the Affordable Care Act’s mandates and benefits. They can act like a stop gap in the case of unexpected unemployment, or they can be an option for people simply interested in bare-bones insurance plans to protect against catastrophes.

It’s a smart policy that will give individuals and states more choice by allowing plans that are less expensive, but also offer fewer benefits.

The plans aren’t necessarily required to cover maternity needs, prescription drugs and mental health benefits. They can also impose certain limits, which can leave policy holders footing the bill for the rest.

Still, the choice it offers individuals and families is what is most important.

Everyone still has the option to buy Obamacare policies if they so wish. But for relatively healthy—and often younger—people, these plans can be a good option.

The Obama administration had cut the short-term plans off at the knees. It ruled the plans had to be 90 days or less, fearing the cheaper options would lure young, healthy people away from the Obamacare exchanges, which would in turn jack up the premiums for all.

But that happened anyway.

Millennials have turned away from the exchanges in droves. And why would healthy people be interested in exchanges in which the premiums are only projected to rise this year and next? The Trump administration is reasonably ending cost-sharing subsidy payments to insurance companies. More than 80 percent of those who selected a plan on the exchanges during open enrollment in 2017 had their costs offset by tax credits.

Without those subsidies, insurers will be required to hike premiums. That will overwhelmingly affect middle-class individuals and families who make more than 400 percent above the poverty level—an individual with income of about $48,000 or a family of four that makes more than $98,400. Nationwide their costs will rise about 20 percent by 2018, and 25 percent by 2020, according to the Congressional Budget Office.

According to Gallup, nearly 3.5 million new individuals became uninsured from the end of 2016 to the end of 2017. Now 12.3 percent of U.S. adults lack insurance, which is the highest rate since late 2014 and not significantly below the 15 percent who were uninsured when Obamacare was enacted. Adults ages 26-34 make up the largest chunk of uninsured.

Offering these short-term plans, and allowing them to be renewed when they expire, is a step toward more choice for more Americans. That’s not a bad thing.