The Obamacare exchanges are in a financial death spiral. Predictably, young and healthy people are choosing to not buy the Affordable Care Act (ACA) insurance loaded with benefit mandates they don’t want and can’t use. This leaves older, sicker, and more costly individuals in the exchanges, which pushes premiums higher to cover their costs. As premiums go higher, purchasing health insurance in the exchanges becomes even less attractive to young, healthy people.

One very reasonable alternative for these individuals is a plan called short-term, limited-duration insurance. These plans were originally designed to be used by people transitioning from one plan to another, for example while changing jobs. The Obama Administration limited their duration to 90 days. This week, the Trump Administration finalized the ruling that extends their use to 364 days. (here)

The plans are also renewable without new underwriting for an additional two years. In other words, once enrolled, a patient has guaranteed health insurance for three years. The Trump Administration estimates that 600,000 people will enroll in these plans next year, with a potential market of 1.6 million individuals.

The plans are much cheaper than ACA-approved insurance because they don’t have all of the benefit mandates and other Obamacare regulations included. They do not necessarily cover pre-existing conditions, but insurers are required to clearly state that the plans are not compliant with the Affordable Care Act.

Washington State Insurance Commissioner Mike Kreidler doesn’t like them and wants to restrict their use in our state. (here) He firmly believes that young and healthy people should pay ever-increasing premiums and be forced to purchase insurance they don’t want. According to opponents, these plans are “junk” insurance and individuals should have no other alternative than Obamacare health insurance.

A better alternative would be to allow people to purchase health insurance that fits their actual needs. A renewable, short-term, limited-duration plan could be reasonably priced, would protect young, healthy people from the costs of major illness, and would be financially attractive.

There is no question that the ACA has helped some people. However, the law has not fulfilled the promises made to the American public. Obamacare has not provided universal health insurance, it has not held down health care costs, and it has not simplified our health care delivery system.

Elected officials should now welcome alternatives to Obamacare.