A federal judge ruled Friday that the Trump administration may allow the sale of short-term health insurance plans, less costly alternatives to Obamacare that do not cover pre-existing illnesses.
The decision was issued in Washington, D.C., by Judge Richard Leon, a George W. Bush appointee, who wrote of the Trump administration’s offerings that the “benefits are undeniable.”
The lawsuit was brought by the Association for Community Affiliated Plans, which calls short-term plans “junk insurance” and vowed to appeal shortly after Leon issued his decision.
The Trump administration has expanded the use of short-term plans. The plans do not have to cover pre-existing conditions, such as treatments for cancer or diabetes, and omit the broader range of coverage that Obamacare provides, such as maternity care and mental health. Such omissions help make coverage less expensive.
The lawsuit argued that Obamacare was intended to end such practices, arguing that they were put at an unfair disadvantage because they have to follow the rules of the healthcare law that prohibit sick people from being turned away.
The Obama administration allowed people to buy short-term health insurance during most of Barack Obama’s term, but, in April 2016, restricted the time people were allowed to be on the plans to three months — a rule the Trump administration overturned. Under the Trump administration’s new rules, people can renew their short-term coverage twice, for a maximum of 36 months.
The administration has framed the provision as an alternative for Obamacare customers who are priced out of the market and would otherwise go uninsured. At the same time, the White House is waging a lawsuit against all of Obamacare to have the law thrown out in its entirety, which would undo the rules on pre-existing conditions as well as a broad array of other healthcare rules.
Leon had initially ordered the plaintiffs to refile their arguments until they had data to show their businesses had been harmed. Enrollment data for the most recent Obamacare enrollment found only a slight decrease in the purchase of plans.
Leon cited the enrollment trend in his decision, saying that “potential negative impacts” were “minimal.” He also noted the fact that the Obama administration had allowed the short-term plans for six years after Obamacare became law. Congress, he concluded, gave the executive branch the authority to regulate short-term plans.
In a statement, Health and Human Services Secretary Alex Azar called the decision a “clear victory for American patients who saw their costs rise and choices disappear” under Obamacare.
He vowed the Trump administration would “continue taking action to provide all Americans with ways to finance their care that provide the affordability they need, the options and control they want, and the quality they deserve.”
