by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Short-term insurance existed as a niche market before Obamacare. As the name suggests, the plans were designed to cover gaps in coverage, up to 12 months.
But once Obamacare went into effect and premiums in the individual insurance market spiraled upward — doubling from 2013 to 2017, and up other 27% in 2018 — the short-term insurance market exploded. It rocketed up by 121% in just Obamacare’s first two years.
Rather than recognize this for what it was — a clear sign that Obamacare was failing — the Obama administration tried to kill this market off by limiting short plans to just three months. The rule mandating this didn’t go into effect until late 2016, and Trump reversed it the first chance he got.
Every study that’s looked into it concluded that Trump’s reversal would expand insurance coverage, with some estimates as high as 4 million. Unfortunately, several Democratic states reimposed the Obama limits. And those in the House want to do so nationwide.
The non-partisan Congressional Budget Office says that if those House Democrats got there way, 1.5 million more people would be forced off plans they like.
No matter. Democrats say this is “junk insurance” that nobody should be buying.
But that, too, is a lie.
A new study from the Manhattan Institute found that short-term plans often provided better coverage at lower cost than comparable Obamacare plans.