Appeals Court Upholds Rule Expanding Short-Term Health Plans

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The U.S. Court of Appeals for the District of Columbia Circuit upheld a decision allowing the sale of short-term health plans that don’t comply with the Affordable Care Act, a win for the Trump administration, which seeks to undermine the health law by expanding access to cheaper, less comprehensive health insurance.

The court on Friday upheld the administration’s regulation that expanded the sale of such plans as a substitute for comprehensive health insurance.

The Association for Community Affiliated Plans, which represents nonprofit health plans, and other groups sued in 2018 arguing the rule should be struck down because it didn’t comply with the Obama-era health law.

The appeals court in a 2-to-1 ruling said the Trump administration’s approach wasn’t contrary to federal law, and it rejected claims that the regulations were unreasonable and arbitrary.

The case stems from a rule the Trump administration released in August 2018 that expanded access to short-term health plans. Previously, the plans could be carried for only 90 days. The rule allowed them to be carried for a year and renewed for total coverage of as long as 36 months.

The plans are generally lower priced but can deny coverage based on consumers’ pre-existing health conditions. They also don’t have to provide the same benefits as ACA-compliant plans.

The plaintiffs argued the rule undermined the ACA and would siphon consumers away from plans that are compliant with the health law. U.S. District Judge Richard Leon in July 2019 dismissed the lawsuit and it was appealed.

The court on Friday said the Trump administration’s approach wasn’t contrary to federal law and rejected claims that the regulations were unreasonable and arbitrary.

The Association for Community Affiliated Health Plans vowed to appeal Friday’s decision, calling the short-term health plans that come with less robust benefits “junk insurance.”

“Junk insurance is an inferior and hazardous substitute for comprehensive coverage,” said Margaret Murray, chief executive of the group. “The court’s decision today protects these plans and their harmful practices, placing patients, families, and providers at increased risk amidst a global health emergency.”

“Thanks to the president’s actions and today’s decision, millions of Americans can have access to affordable, short-term insurance plans that make sense for their needs,” Health and Human Services spokesman Michael Caputo tweeted.

“Today’s ruling protects important and affordable coverage options for middle-income families, workers between jobs, and the self-employed who have been severely harmed by the ACA and also means more people will have health insurance coverage,” said Brian Blase, who was special assistant to the White House on health policy during the Trump administration.

The dissenting judge said the regulation flies in the face of the goals of the ACA.

The short-term health plans mark one of the Trump administration’s most significant erosions of the ACA, which sought to set minimum health-insurance benefits and protections for people buying health coverage on the open market.

Supporters of the short-term plans say the ACA caused premiums to rise, which priced too many consumers out of the market. They say short-term plans provide a more affordable coverage option.

Critics argue the plans raise prices for ACA plans because they draw younger, healthier people away from the ACA policies. That demographic is needed to help offset costs for older, sicker consumers. They also say the plans leave policyholders at risk because they often don’t cover existing conditions and can deny people coverage.

Former Vice President Joe Biden, the presumptive Democratic nominee for president, criticized the ruling. “It’s wrong that during this global health crisis, Trump’s administration is propping up low-quality health care instead of devoting more resources to getting the virus under control and making sure everyone can access care and treatment,” he said in a statement Friday.


This article originally appeared in The Wall Street Journal at wsj.com.