If that’s true, the Trump executive order will be a big help for consumers who legitimately want to buy coverage for a set period of time.
A federal regulation adopted toward the end of the Obama era requires now consumers who use short-term medical policies to buy new policies, with new deductibles, every 90 days. That change hurt consumers, and it did nothing to stabilize the individual major medical market or the Affordable Care Act public exchange system.
But, remember, even though the president has signaled his intent to change regulation, and may issue an executive order that appears to change the regulation, the change is unlikely to happen immediately. The wheels of the federal bureaucracy are not as nimble as Trump tweets or Trump proclamations.
But, if the executive order or another administration move eases short-term medical sales restrictions, that would be good news, and it should start to help consumers who will need health coverage for 2018.
There is a great niche market for short term medical, in part because of the following three reasons:
1. Life changes
The product fits consumers who are between jobs, contemplating an early retirement, or turning 27 and coming off a parent’s plan. And — increasingly — the product also fits consumers who earn too much to qualify for subsidies but too little to afford even a high-deductible, bronze-level Affordable Care Act plan.
2. Affordability issues
A consumer who buys a short-term medical plan may be subject to a tax penalty for not having what the government classifies as minimum essential coverage. However, there are many exceptions to the Affordable Care Act individual coverage ownership mandate, including one for consumers who would have to spend more than 8.13% of their income to buy the lowest-cost Affordable Care Act plan available.