This month, the Trump administration dealt what may be its biggest blow yet to the insurance markets. In a new rule, it announced that insurers will have more latitude to sell “short-term” health plans that are exempt from the Affordable Care Act’s rules. These plans were designed to provide people insurance for small gaps in coverage, like those created when switching jobs. They had previously been limited to three months.
Under Mr. Trump’s new rule, however, such plans can last for 364 days and can be renewed for up to three years. That rule joins an earlier one that allowed businesses to join together to create “association health plans” that also evade the Affordable Care Act’s strictures. In effect, these rules are creating a cheap form of “junk” coverage that does not have to meet the higher standards of Obamacare. This sort of splintering of the insurance markets is not allowed under the Affordable Care Act as Congress drafted it.
The Trump administration’s goal is not only to weaken the Affordable Care Act but also to trick the public into thinking, as opponents of the law like to say, that Obamacare is “collapsing under its own weight.” Let’s be clear: If the Affordable Care Act collapses, it is because the president demolished it.