The Large Benefits of Short-Term Health Insurance

Source: EconLog
by David Henderson

“The 1996 Health Insurance Portability and Accountability Act (HIPAA) allowed state governments to have short-term limited duration health insurance (STLDI). The contract could last up to 364 days. But after the Patient Protection and Affordable Care Act (PPACA, henceforth ACA) was implemented in 2014, the Obama administration, concerned that healthier people would buy these contracts, leaving a sicker pool and, therefore, higher premiums and taxpayer subsidies in the ACA market, limited the plans to 3 months. This was implemented in 2016 and reversed by the Trump administration in 2018. Being able to be insured for a whole year has been valuable to millions of people. And losing one’s insurance after 3 months can be catastrophic. … that comes about not because of a big bad insurance company but because of explicit and intended government policy.” (09/13/23)