TRUMP ADMINISTRATION

Obamacare takes new hit from court
Judge backs expansion of short-term policies that offer, and cost, less
By ANDREW HARRIS and JOHN TOZZI
Bloomberg News

The Trump administration can expand the sale of short-term health insurance policies that don’t meet the standards of the Affordable Care Act, a federal judge has ruled, advancing the government’s efforts to undo Obamacare.

U.S. District Judge Richard Leon in Washington rejected challengers’ claims that policies sold under a government regulation unlawfully undermine the ACA, passed by Congress in 2010 to make comprehensive coverage more widely available regardless of a consumer’s pre-existing health conditions.

“Not only is any potential negative impact” from the rule “minimal, but its benefits are undeniable,” Leon wrote. He said there was no evidence that the rule “is having or will have the type of impact — substantial exodus from the individual market exchanges — that would threaten the ACA’s structural core.”

Shares of companies that sell short-term health policies, including Health Insurance Innovations Inc. and eHealth Inc., jumped on news of the decision.

The ruling lets insurers offer far cheaper plans to healthy people, freed from the ACA’s protections for those with preexisting conditions as well as from its other requirements. That could lead to higher premiums for people in ACA-compliant plans by siphoning off healthier consumers from the ACA risk pool over time.

The judge based his ruling partly on the elimination of the individual-mandate tax penalty in the GOP’s 2017 tax law. Some Republican senators have since said they didn’t intend their vote to undermine protections for people with pre-existing conditions.

Sen. Susan Collins of Maine was the only Republican to vote for a Democratic resolution opposing the short-term plan regulation in October.

“It is essential that individuals who suffer from pre-existing conditions are covered,” she said then.

Those suing to overturn the Trump administration’s short-term health insurance rule argued that the measure, which took effect Oct. 2, thwarted Congress’ intent by letting the plans last as long as 364 days and be renewed for three years. The Obama administration had limited them to three months.