Appeals court upholds Trump admin’s expansion of short-term health plans

Dive Brief:

  • On Friday, an appeals court upheld the expansion of short-term health plans that don’t comply with the Affordable Care Act in a legal win for the Trump administration’s healthcare agenda.
  • In a 2-1 ruling, the U.S. Court of Appeals for the District of Columbia decided against the plaintiffs, the Association for Community Affiliated Plans, which represents nonprofit insurers, and other groups, finding HHS’ decision to allow sales of the plans as an alternative for other insurance wasn’t illegal, unreasonable or arbitrary.
  • U.S. District Judge Richard Leon first dismissed the suit, in which the plaintiffs argue the expansion would draw younger, healthier consumers away from the ACA exchanges and harm the risk pool, in July last year, and ACAP appealed. The group said it would also appeal Friday’s decision, slamming the bare-bones plans — which sparked a yearlong Democrat committee investigation — as “junk insurance.”

Dive Insight:

The Trump administration in 2018 extended the maximum duration of short-term plans to a year, though they were originally designed as cheap safety net coverage for just three months. The skimpy coverage, which HHS has said could be renewed for up to three years, isn’t required to cover the 10 essential benefits under the ACA and widely discriminate against people with pre-existing conditions and women, per a House investigation that closed late last month.

“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,” ACAP CEO Margaret Murray said in a statement. ACAP represents 74 safety net plans covering more than 20 million Americans.

The dissenting judge, Judith Rogers, agreed the changes were inconsistent with the purpose of the ACA.

But in his majority ruling, Judge Thomas Griffith wrote HHS acted within its authority and complied with legal statute, and noted the short-term, limited duration insurance plans had only limited effects on exchange enrollment and premiums.

“Can the Departments cap STLDI plans at nine months? Ten months? Eleven months? Without further guidance from Congress, we will not place amorphous restrictions on the Departments’ authority to define such an open-ended term,” Griffith, who has served on the court since 2005, wrote. “Congress granted the Departments wide latitude to define STLDI, and while the Departments retain the flexibility to narrow their definition in the future, nothing in the text forecloses their current interpretation.”

HHS did not respond to a request for comment by time of publication, but has defended the plans in the past as a low-cost alternative for pricier but more robust ACA coverage.

But the Trump administration’s health agenda has been defined by numerous attempts to chip away at the decade-old law, including expanding its short-term alternatives, cutting navigator and marketing funding, shortening the window to apply for coverage and backing a lawsuit seeking to find the law unconstitutional, currently in front of the U.S. Supreme Court.

Short-term insurance represents a significant and growing share of the individual healthcare market. Roughly 3 million consumers bought the plans in 2019, a 27% growth from 2018, according to the investigation by the House Committee on Energy and Commerce.

Currently, 24 states ban or restrict the sale of short-term plans.

Posted in Law