Four Changes to Short-Term Health Plans

The Affordable Care Act (ACA), popularly known as “Obamacare,” has continued to evolve healthcare laws and how the government addresses public health issues. Four important changes are coming into play in 2019, but many consumers are unaware how these various proposals have the potential to affect their care.

When a new administration and a Republican-led Congress came to power in 2017, healthcare was a prominent political issue, and this trend has continued for two years. The whirlwind of proposals, votes, and debate in Washington politics has left many consumers confused as lawmakers wrestled to bring legislation to the table.

On May 4, 2017 the U.S. House of Representatives passed the American Health Care Act with a tight vote of 217 to 213. The Senate didn’t adopt this legislation so it never became law. Then on July 26, 2017 the U.S. Senate rejected a repeal of the ACA by a vote of 51 to 49 under proposed legislation called the Healthcare Freedom Act.

It was another swing and a miss. Finally, the Tax Cut and Jobs Act passed in December 2017 by a vote of 227 to 203, with an important provision for healthcare.

Here are the four changes to short-term health plans that will affect consumers in 2019.

1. End of the Individual Mandate

With the passage of the ACA in 2010, an “individual mandate” required Americans to purchase health insurance or face a penalty if they weren’t already covered by their employers or a program such as Medicare or Medicaid. The Tax Cut and Jobs Act repealed this portion of the ACA for 2019, giving taxpayers greater options for finding coverage.

While it was predicted that the end of the mandate would result in people dropping out of the exchanges, heavy federal subsidies that offset premiums in the marketplace seem to be keeping many Americans participating. It’s estimated that up to 80 percent of the population benefits from the subsidies.

With some room to breathe, many people who felt they weren’t benefiting from the exchanges or those who were young and healthy are likely to begin looking at all the options for healthcare coverage.

2. Rise of Short-Term Policies

With the changes made to the individual mandate, consumers were given an opportunity to purchase coverage under short-term health policies. These plans were initially offered as a temporary solution to bridge the gap when major medical coverage ended, when they weren’t eligible for an exemption or special enrollment period for a “qualifying life event,” or when consumers were waiting to enroll in the marketplace exchanges.

Because short-term health policies only cover the essential services consumers need, they often come with the added benefit of lower premiums. As a result of no longer requiring taxpayers to purchase coverage that meets “minimum essential coverage” (MEC), the strict government standards that a policy must meet or the insured pays a penalty, many people began flocking to these plans.

Insurers have responded favorably to the easing of federal restrictions. Many companies have expanded their offerings of short-term health policies, allowing consumers to customize their coverage and tailor the term of their insurance plans.

It’s expected that short-term health plans will continue to see vigorous growth.

3. Addressing the Opioid Crisis

In 2017, the U.S. Department of Health and Human Services (HHS) declared a public health emergency regarding the growing American opioid crisis. There is intense pressure to address doctors “over-prescribing” opioid medications.

The HHS estimated that at least 64,000 people died from opioid overdoses in 2016. By declaring the emergency, HHS could accelerate appointments of specialized personnel to address the crisis.

Consumers will likely see changes surrounding how doctors prescribe pain medications and how these prescriptions are handled.

4. Lower Drug Prices

Consumers have been complaining about rising drug prices for years, and it looks like their voices are finally being heard. In 2017, more new drugs came to market than any time since 1996, but they came with steep prices.

Insurers responded by launching into aggressive negotiations and financial deals that could result in more power within the drug market. It’s expected that all of this could create an opportunity for lower prices for consumers.

It’s also expected that Food and Drug Administration (FDA) chief Scott Gottlieb will expedite generics entering the market. In his keynote address at the 2018 Food and Drug Law Institute Annual Conference in May, Gottlieb called for greater competition to “improve access and support the market-based pricing that underwrites the high cost of new, lifesaving” drugs.

With so much attention being paid to healthcare and the cost for Americans to be healthy, politics in 2019 will continue to focus on this important issue.

In conclusion, 2019 will see consumers coming out on top as a result of these four changes to short-term health plans.

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