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Trump's Short-Term Health Move May Get States Hopping

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The Trump administration is trying to make short-term health insurance a stronger alternative to individual major medical insurance.

That effort is pushing the National Association of Insurance Commissioners to update the model law and model regulation that govern short-term health insurance, critical illness insurance, dental insurance, disability insurance, and most other health insurance products other than major medical insurance.

Regulators are already debating how they should handle revisions to the Accident and Sickness Insurance Minimum Standards Model Act, and to the model regulation that goes with the model act.

The NAIC’s Accident and Sickness Models

Timothy Stoltzfus Jost, one of the people who represent consumers in NAIC proceedings, wants the NAIC’s Regulatory Framework Task Force to draft updates to the accident and sickness models as quickly as possible, according to the minutes from a task force conference call meeting held in October.

A task force subgroup has been working on revisions to the accident and sickness models for years, but the subgroup has not met since 2016.

(Related: 5 Hot Battles Over the ACA-Free Zone)

Updating the models quickly is crucial, because the models are now obsolete, and they no longer provide any meaningful regulation for short-term health insurance, Jost said.

Jost asked the task force to add updating the models to its official list of charges for 2018.

J.P. Wieske, the Wisconsin regulator who presided over the task force conference call, said the accident and sickness model subgroup will resume working on the accident and sickness models as soon as a second task force subgroup completes work on a prescription drug benefits management model.

The task force did not end up adding a short-term health insurance or accident and sickness model to its list of charges.

Wieske did put a discussion of the accident and sickness models on the agenda for a meeting the task force will hold Dec. 2, in Honolulu, at the NAIC’s national fall meeting.

President Donald Trump (Photo: White House)

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President Donald Trump (Photo: White House)

The NAIC fall meeting is set to run from Nov. 30 through Dec. 4.

The NAIC is a group for state insurance regulators. States can choose whether or not to adopt NAIC models. In some cases, states adopt NAIC models as written. In other cases, states start with NAIC models when drafting their own insurance laws and regulations. 

Short-Term Health Insurance Change

The Affordable Care Act frees short-term health insurance from the benefits and underwriting rules that apply to individual major medical coverage.

Under federal law, a short-term health insurance issuer can reject sick applicants and cap annual benefits. 

The number of people with short-term health insurance appears to be small, but the Obama administration added a 90-day coverage duration limit to keep consumers from using short-term health as a year-round alternative to major medical insurance.

Obama administration officials argued that letting younger, healthier consumers make extended use of short-term health insurance would weaken those consumers’ coverage, and hurt the major medical issuers, by leaving the major medical issuers with older, sicker enrollees.

In October, President Donald Trump issued an executive order on health insurance. In one section, he asked his administration to eliminate the 90-day short-term health insurance duration limit.

The U.S. Department of Health and Human Services recently began putting a short-term health insurance proposal through regulatory review process at the Office of Management and Budget, according to the OMB tracking system.

—Read Regulators Post Sickness Insurance Drafts on ThinkAdvisor.

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