Could this new proposal weaken Obamacare even further?

The Trump administration rolled a new proposal Tuesday morning that would expand access to short-term health insurance plans that are exempt from crucial Obamacare requirements, causing many to fear for the future stability of the Affordable Care Act state exchanges.

“Americans need more choices in health insurance so they can find coverage that meets their needs,” Health and Human Services Secretary Alex Azar said Tuesday. “The status quo is failing too many Americans who face skyrocketing costs and fewer and fewer choices.”

The administration’s proposal would expand consumer access to more affordable coverage–short-term, limited duration health insurance plans–as a direct alternative to Obamacare plans offered on the Affordable Care Act (ACA) exchanges. These short-term plans are cheaper because they do not have to cover pre-existing conditions or cover Obamacare’s “essential health benefits.”

Traditionally, short term health plans are meant for those who are in need of temporary coverage. For instance, maybe a person lost their job and, with it, the company’s employer-sponsored insurance plan.

Short-term health insurance plans come with an important caveat that Obamacare plans do not have. Unlike plans purchased on the Obamacare exchanges, short-term health insurance plans can cap payouts, which means consumers could get hit with a huge bill if they have some catastrophic health event.  read more