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Giving Compass' Take:
· Chris Pope examines the faults in the Affordable Care Act and how short-term limited duration insurance (STLDI) plans can provide the same amount of coverage as plans under the ACA but at a much lower cost to consumers.
· Why are costs for STLDI plans lower than those under the ACA? Has the government prevented citizens from receiving affordable health care in the past? How did the Affordable Care Act change the health insurance market?
The Affordable Care Act (ACA) was designed to fund health insurance for individuals who have preexisting medical conditions, by requiring insurers to overprice insurance for people who sign up before they get sick. This feature has made health plans on the individual market a very poor value for most low- and medium-risk Americans—causing millions to abandon coverage, premiums to soar, deductibles to spike, and insurers to flee the market. This feature is also unnecessary because the ACA provides billions in public funds to subsidize premiums, and these subsidies automatically expand to guarantee coverage for those with preexisting conditions.
Short-Term Limited-Duration Insurance (STLDI), which is exempt from ACA rules, survived as a viable competitive market, offering health coverage priced in proportion to individuals’ risks. A recent regulatory reform has extended the permitted duration of STLDI policies, to protect enrollees from deductibles being reset every three months and to allow insurers to guarantee that enrollees’ premiums will not spike if they develop major medical conditions.
STLDI has been disparaged as “junk insurance” that fails to cover adequate provider networks, offers only catastrophic coverage, makes essential benefits unavailable, helps only young and healthy individuals, undermines protections for those with preexisting conditions, and causes premiums for plans on the ACA’s exchange to soar. This study of the STLDI market finds that each of these claims is false.
Read the full article about tailored health insurance plans by Chris Pope at the Manhattan Institute.