Short-Term Health Plans Projected to Increase Premiums

A new policy report examining the effects of the Trump administration’s changes to the Affordable Care Act (ACA) finds that premiums will rise in ACA insurance plans and more people will be without insurance in certain states.

The Urban Institute, a liberal think tank, examined state-by-state the combined effects of eliminating the individual mandate penalties and expanding the use of short-term limited-duration insurance plans that are not compliant with the ACA. Those 2 changes will increase premiums by 18.2%, on average, in 2019 in the 43 states that do not prohibit or limit short-term plans, it found.

The report noted that the short-term plans would compete with plans regulated by the ACA, which offer more robust health coverage by prohibiting annual and lifetime benefit limits, requiring coverage of all essential health benefits, and otherwise prohibiting insurers from setting premiums or choosing whether to sell coverage to consumers based on pre-existing conditions. The Congressional Budget Office does not consider the short-term plans private insurance.

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