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Trump win on health plans advances his effort to undo Obamacare

Andrew Harris and John Tozzi, Bloomberg News on

Published in Health & Fitness

WASHINGTON -- The Trump administration can expand the sale of short-term health insurance policies that don't meet the standards of the Affordable Care Act, a federal judge ruled, advancing the government's efforts to undo Obamacare.

U.S. District Judge Richard Leon in Washington rejected challengers' claims that policies sold under a government regulation unlawfully undermine the ACA, passed by Congress in 2010 to make comprehensive coverage more widely available regardless of a consumer's pre-existing health conditions.

"Not only is any potential negative impact" from the rule "minimal, but its benefits are undeniable," Leon wrote in a 40-page ruling. He said there's no evidence the rule "is having or will have the type of impact -- substantial exodus from the individual market exchanges -- that would threaten the ACA's structural core."

Shares of companies that sell short-term health policies, including Health Insurance Innovations Inc. and eHealth Inc., jumped on news of the decision.

Two years after Senator John McCain gave the thumbs-down to his Republican colleagues' effort to repeal the ACA, the fight over President Barack Obama's signature legislative achievement continues. And it's heating up.

In March, another federal judge in Washington rejected the administration's attempt to permit small businesses to band together to offer "association health plans" exempt from ACA rules, calling it "an end run around the ACA." The same month, a third judge struck down administration-backed policies in Kentucky and Arkansas that required many people on Medicaid to work in order to maintain their eligibility for the health program for the poor.

 

Meanwhile, a federal appeals court is weighing a request to overrule a Texas judge's decision late last year to strike down the ACA in its entirety, a move supported by the Justice Department.

Those suing to overturn the Trump administration's short-term health insurance regulation argued that the rule, which took effect on Oct. 2, thwarted Congress's intent by permitting the plans to last as long as 364 days and to be renewed for three years. The Obama administration had limited them to three months. Leon heard arguments in the case on May 21.

The rule could create a longer-lasting alternative to ACA coverage that might lure healthier patients away from Obamacare, undermining the risk pools it depends on in offering its more comprehensive coverage, the plaintiffs argued. An attorney for the administration countered that there was a demand for policies cheaper than Affordable Care Act plans and that their availability hadn't drawn people away from ACA coverage.

"No legislation pursues its purposes at all costs," Leon wrote in rejecting the plaintiffs' arguments. "To be sure, the ACA's various reforms are interdependent and were designed to work together as features of the individual exchange markets. However, Congress clearly did not intend for the law to apply to all species of individual health insurance."

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