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Vermont May Require Short-Term Plans to Include Obamacare Benefits

December 12, 2018

The Vermont Department of Financial Regulation is considering a plan that would require Obamacare’s 10 “essential health benefits” to be provided in all short-term, limited-duration health insurance plans sold in the state.

In August, the Centers for Medicare and Medicaid Services (CMS) issued a rule expanding the term length of short-term health insurance plans, which are exempt from many of Obamacare’s costly coverage mandates, from three months to 12 months, and CMS is now allowing short-term plans to be renewed for up to 36 months.

The Trump administration has encouraged states to allow residents to purchase these short-term plans, which are significantly more affordable than Obamacare plans.

“Short-term, limited-duration insurance is a type of health insurance cover- age that was primarily designed to fill gaps in coverage that may occur when an individual is transitioning from one plan or coverage to another plan or coverage, such as in between jobs,” CMS said in a statement announcing the rule.

Undercutting Their Value

Justin Haskins, executive editor and a research fellow at The Heartland Institute, which publishes Health Care News, says Vermont would be doing its residents a disservice by requiring Obamacare-mandated health benefits in plans that are more affordable precisely because they do not include coverage many people do not want or need.

“Vermont is making a massive mistake,” Haskins said. “Forcing short-term health insurance plans to include the Affordable Care Act’s ‘essential health benefits’ completely undercuts one of the primary reasons short-term plans are so much more affordable compared to Obamacare plans: The essential health benefits drive up the cost of insurance by forcing people to pay for coverage they don’t need or want, such as substance abuse services.

“Rather than mandate and manipulate consumers, Vermont and other states should let those purchasing health insurance coverage have a choice about what they want in their plans,” Haskins said.

Choice or Government Mandate?

John McClaughry, vice president and founder of the Ethan Allen Institute and a former senior policy advisor to President Ronald Reagan, says Vermont lawmakers object to short-term plans because they increase consumer choice, which conflicts with the legislators’ effort to impose taxpayer-funded socialized medicine.

“The Vermont legislature is controlled by liberal Democrats and progressives, who, for over a decade, have been enthusiastic about making Vermont the first state in the nation to install Canadian-style single-payer health care,” McClaughry said. “That notion crashed in December 2014, when Democratic Gov. Peter Shumlin announced there was no way in the world the Vermont taxpayers could produce the $2 billion required to make it happen.”

Despite that setback, the Vermont government has consistently impeded access to the reforms the Trump administration has made available, because they would interfere with the state’s movement toward single-payer, McClaughry says.

“The legislature has been keen to protect every feature of Obamacare while installing All Payer [a system to standardize treatment payments throughout the state], described [by its critics] as ‘single payer with a fig leaf,’” McClaughry said. “At the same time, it is determined to shut off every escape hatch from Obamacare allowed by the Trump [rule changes]. This has included making short-term policies as difficult and expensive as possible by requiring Obamacare ‘minimum essential coverage,’ installing a state-level individual mandate to purchase policies with that same coverage, and shackling association health plans with burdensome rules.”

Benjamin Moulton (bmoulton2016@gmail.com) writes from Salem, Virginia.

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