Trumpcare: Yet One More Scam

So Il Trumpe et alia rolled out an ‘amazing’ healthcare proposal (remember when Il Trumpe claimed your healthcare was going to be amazing?). Does it provide subpar quality compared to other products? Yes! When it fails, will you have little legal recourse? You betcha! Then it’s a typical Trump product (boldface mine):

The Trump administration has just completed rules that will allow people to shop for a new kind of health insurance. So-called short-term plans will be offered for relatively long periods — just under a year at a time, with renewals for up to 36 months — and they will be marketed extensively in most states.

They will tend to have substantially lower prices than the insurance people can buy in Obamacare markets, and for some people they may look like a better option. But the plans are cheaper for a reason: They tend to cover fewer medical services than comprehensive insurance, and they will charge higher prices to people with pre-existing health problems, if they’ll cover them at all.

That means that it’s really important to shop carefully. Such plans frequently contain a lot of fine print and tend to have a lot more holes in coverage than the Obamacare plans that most people who buy their own insurance currently have.

But I’m sure you’ll do fine versus these companies’ legal and sales teams–which, unlike the plans, will be fully-equipped:

According to research from the National Association of Insurance Commissioners, the average short-term plan in 2017 spent less than 65 percent of premium dollars on medical care. Some of the short-term plans in the association’s analysis keep more than half of all premiums as overhead and profit.

Brokers also tend to make higher commissions on the short-term plans, since the companies share a cut of their larger profits to get referrals. According to eHealth, a national online brokerage, a typical Obamacare-compliant plan pays a commission of around 5 percent, while short-term plans pay out commissions closer to 20 percent. Because short-term plans are currently limited to 90 days, brokers now make more money selling comprehensive plans that cover more benefits.

However, that math may shift as short-term plans expand their duration under the new rule, giving brokers a stronger financial incentive to sell short-term plans instead.

What could possibly go wrong? Finally, it’s worth revisiting the fundamental problem with the ACA, which is why we have the opening for Trumpcare:

In some markets, insurance that complies with all the Obamacare rules has gotten very expensive. For some individuals and families earning too much to qualify for subsidies to help them buy a plan, affording a comprehensive policy can be a struggle. That’s why Trump administration officials say they moved to expand options, like short-term plans, that are more lightly regulated…

The Kaiser study looked at the prices of plans in a handful of American cities and found plans that cost only a fraction of the cost of Obamacare insurance. In Atlanta, for example, the least expensive Obamacare plan for a 40-year-old single man was $371 a month. The cheapest short-term plan cost only $47.

In a recent customer survey, eHealth found that more than half its current short-term plan customers said they would have been uninsured had the option not existed. Scott Flanders, the company’s C.E.O., says the plans will provide a good option for healthier customers who simply can’t afford a more comprehensive plan. “You can sit there and say major medical is better than short-term,” he said. “But people don’t have the budget for it.”

And that was obvious in 2008 (and 2010 [cough] Krugman [cough]), by the way.

Medicare for All, now.

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