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Freeing Up Short-Term Coverage Seen as Boon for Insurers

By Gregory A. Freeman  
   November 15, 2017

A three-month limit was originally intended to close a loophole in Obamacare coverage requirements. The Trump administration's removal of that restriction has insurers rushing to satisfy consumers who need this option.

The Trump administration's executive order aimed at reversing the Obama administration's rule restricting short-term health coverage to less than three months is prompting health plans to quickly put together products that could benefit a range of consumers who need access to gap health plans.

It also knocks another leg out from under the Affordable Care Act. The disadvantages that come with the three-month rule were intentional, to encourage fuller participation in the health insurance exchanges.

The short-term rule issued by the Obama administration only went into effect in April 2017, so the true effect has not yet been seen. Prior to April, consumers had the option to enroll in short-term plans that were typically far cheaper than a plan on the Affordable Care Act exchanges.  The three-month rule was intended to close a loophole in the original law that critics said would have allowed people to buy short-term coverage when they could have purchased a plan during open enrollment.

The removal of the three-month limitation will be welcomed not only by short-term policyholders but also by a diverse range of policymakers and industry leaders, says Kev Coleman, head of research and data with, a free website that compares and ranks all health insurance plans. Some policymakers welcome the move as a way to placate consumers who are unhappy with the sharp increases in premiums and deductibles, and those left unhappy that the Trump administration has not dismantled Obamacare altogether.

Gregory A. Freeman is a contributing writer for HealthLeaders.

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