AARP is undertaking a multi-front lobbying campaign to defeat newly proposed regulation and legislation that would greatly expand the benefits of short-term health insurance plans for younger Americans, while lifting the protections and premium caps currently protecting Americans 50 and older.

“The ultimate concern is we return to a market where all the things that ACA prohibited, like pricing older Americans out of the market, are allowed again,” Megan O’Reilly, director of AARP’s Federal Health & Family Team, told Financial Advisor.

The new U.S. Department of Labor proposal would allow the “short-term” health insurance market to go from offering 90-day “skinny” policies to 364-day policies, while being able to increase premium prices based on age and even deny coverage to those with pre-existing conditions like cancer, diabetes and asthma.

The Urban Institute estimates that the proposed regulatory changes will increase premiums by between 16.6 percent and 20 percent -- or over $2,000 in 2019. AARP contends premium increases could hit the $4,000 mark or higher annually for 60-year-olds who buy a silver plan in the Affordable Care Act marketplace if the short-term marketplace is allowed to expand.

“We know we have six million 50-64 year olds in the ACA market,” O’Reilly said. “They could be refused coverage in the short-term market. Another big point with these plans is that 40 percent of 50- to 64-year-olds have pre-existing conditions, so they could be denied coverage for any of these.”

The DOL proposal would also “slap Americans in short-term plans with an age-rated tax,” O’Reilly said. While ACA regulations prohibit health insurers from charging older Americans more than three times the premiums of younger Americans, the DOL proposal would lift those limits. “We could see premiums for 50-64 year olds cost five- or even 10 times what younger people pay.”

Making matters worse, O’Reilly said, the DOL proposal, which is supported by President Trump, would encourage younger, healthier Americans to leave the ACA market for short-term limited duration insurance plans. “That would definitely raise premiums for millions of hard-working Americans who are currently getting their health insurance coverage through the individual (ACA) market,” she said.

So far, the AARP appears to have successfully beaten back an attempt to include provisions expanding the benefits of short-term health insurance plans in the $1.3 trillion Omnibus Spending Bill Congress must pass by March 23 to avoid another government shutdown. But that victory may be short-lived, given the looming DOL proposal and a new Senate legislation sponsored by Sen. Lamar Alexander (R-Tenn.).

Alexander’s bill would block states, who typically regulate these short-term plans, from taking steps to protect consumers from dramatic price hikes, pre-existing condition restrictions and coverage denials, the AARP said.

While the short-term health insurance policy market was created to provide stop-gap, 90-day health care insurance -- say, for those in between jobs, and could not be renewed beyond that -- the Trump Administration has pushed the DOL to greatly expand the market by allowing insurers to create 364-day policies that are renewable. “This change effectively makes them almost identical in duration to plans that are required to comply with the ACA,” AARP said in a new blog released Wednesday.

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