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In a naked display of political partisanship, California Democratic legislators made it clear they would prefer residents go bankrupt paying for expensive Obamacare health insurance instead of allowing Californians to purchase more affordable, short-term plans.
In August, the Trump administration issued a rule that expanded short-term, limited-duration health insurance plans. Essentially, the new rule allows these plans, which existed under the Obama administration but required renewal after three months, to be carried up to a year without renewal and to be renewed for up to three years.
Unfortunately, California legislators, led by state Sen. Ed Hernandez (D-San Gabriel), immediately crafted a bill to block the sale of these new plans. Their reason? The plans don’t include Obamacare’s “essential health benefits” and are supposedly nothing more than a political end-run around the Affordable Care Act (ACA).
Their bill, which amounts to a statewide ban on short-term plans, passed the California Legislature and now awaits Democratic Gov. Jerry Brown’s signature. Brown signed the legislation on September 22, codifying into law California Democrats’ desire to offer only more expensive insurance options to state residents.
The protestations before Brown signed off on the bill this weekend from California Democrats who said Republicans were only interested in scoring political points, and not helping people gain access to affordable health insurance plans, were as destructive as they were hypocritical.
The progressive talking point is that these plans, now banned, are “junk” insurance, because they are free from coverage mandates under the ACA and likely won’t cover all the things Obamacare plans are required to cover, such as maternity care and substance-abuse services. But Obamacare was passed in large part because Democrats said health insurance was too expensive for people to afford without help from the government. Now that we know government has only made the problem worse, why wouldn’t they want to free people to purchase cheaper health insurance options? The only logical explanations are that they know admitting defeat on Obamacare will hurt them politically and because many Obamacare supporters care more about increasing the power of government than they do providing people with access to affordable health insurance plans.
And there’s no denying short-term plans provide consumers with more-affordable options. According to The Wall Street Journal, the average mid-level Obamacare plan premium cost $426 per month in 2017. By comparison, the average short-term plan sold in California by online broker eHealth costs $184 per month. According to the Journal, California’s ban on short-term plans could keep as many as 620,000 Californians from being able to purchase a short-term plan next year.
Sally Pipes, president of the Pacific Research Institute, says California lawmakers are being, in a word, hysterical.
“California lawmakers have been influenced by the hysteria raised by many Democratic politicians in Congress and in several states that short-term health plans are ‘junk’ plans,” Pipes told me. “These legislators ignore the fact that over 2 million Californians are insured through the individual market and, in 2019, their premiums will jump nearly 9 percent. As Secretary of HHS Alex Azar has said these plans are not for everyone but the rule expands the availability of inexpensive short-term coverage for 12 months and that is renewable up to a maximum of three years. They are designed particularly to be a stop-gap offering protection for those in transition who might face a medical catastrophe. Many would go without coverage because of the high cost of premiums. California’s leaders are responding by forbidding them from purchasing more affordable coverage.”
Sadly, Golden State policymakers don’t seem interested in providing consumers with more health care insurance choices, and California is not alone. The Fiscal Times reported in mid-August, “Lawmakers in Hawaii are considering a bill that would prohibit the sale of short-term plans to anyone who is eligible for an Obamacare plan.” It also noted, “Maryland has passed a bill limiting the plans to three months, without a renewal option,” and “Washington State’s insurance commissioner may limit the plans to three months and create strict transparency rules aimed at deceptive marketing by insurance brokers.”
Since the federal government can only approve rule changes that allow state lawmakers to make these more affordable health care options available, many Americans will not have access to short-term plans, despite the Trump administration’s best efforts. And that’s exactly the way federalism is supposed to work. It’s up to state legislators to choose whether they want cheaper health insurance plans available in their state. Unfortunately for residents in California, Hawaii, Maryland, and Washington State, their legislators apparently are putting politics over sound policy decisions.
However, there is good news: This fall, residents in all 50 states will have the opportunity to cast votes in favor of candidates that will give them the opportunity to make their own health care choices. Let’s hope they take advantage of this important opportunity.