October 12, 2017
Insurance Commissioner Mike Kreidler issued the following statement in response to President Trump’s executive order on association health plans and short-term medical plans.
“The executive order President Trump issued today proposes a misguided and simplistic solutions to fix a complex problem – the growing costs of health care. The ideas he’s proposing sound very populist. It seems reasonable to allow small employers to band together for the purpose of buying health insurance. It seems reasonable to let people buy short-term medical plans that offer fewer benefits at a lower cost.
“But here’s the reality behind such a simplistic approach -- it ignores the reality of how insurance works. The basic principle behind insurance is the more people you cover, the lower everyone’s costs. Trump’s executive order will allow healthier and younger people to pick skimpier, cheaper coverage, leaving the older and the sick to pay much more. This may lower some peoples’ costs in the short term -- as long as they don’t get sick.
“It also almost guarantees the eventual collapse of our health insurance markets across the country.
Association health plans burden many with higher costs
“Washington state has a long history with association health plans. In fact, more people in Washington state are enrolled in these plans than through our small-employer market. The difference is that some of these plans are not required to include essential health benefits and may charge members more if they have older and sicker employees.
“Association health plans are just one more way to segment the insurance market and pull the good risk out at the expense of people unlucky enough to get sick. Too often people get priced out of coverage.
Short-term medical plans offer few benefits, little protection
“Short-term medical plans are not required to provide comprehensive coverage, out-of-pocket limits are high, and vital essential health benefits are excluded. Most importantly, if you get sick, you may not be able to renew your coverage – there are no protections for people with pre-existing condition. Maternity care and mental-health benefits often are excluded.
“Each of these concepts proposed in the president’s orders would seriously undermine our health insurance markets if allowed to stand alone. Combined, I fear they could do irreparable damage. This does not have to happen. There are concrete ways to lower costs and ensure consumers have protection. I was hopeful about the bipartisan efforts supported by Senators Lamar Alexander and Patty Murray and testified before their committee just last month on the positive steps we could take to move the country forward.
“I seriously question the president’s misguided belief that the only way to provide less expensive health insurance is to do so at the expense of those of us unlucky enough to get sick or who have a health condition. If he is serious about lowering health care costs for everyone, he should support the bipartisan efforts to stabilize the health insurance markets.
“He should also turn his immediate attention to the No. 1 cost-driver in this country --the skyrocketing costs of prescription drugs. That’s a promise he has failed to keep."