A Trump administration effort to make more affordable, short-term medical insurance plans available to more people despite Obamacare’s onerous regulations survived a federal court challenge on Friday.
In a ruling for the United States District Court in Washington, D.C., Judge Richard Leon dismissed a challenge to the 2018 regulation brought by a group of organizations offering insurance plans. The plaintiff organizations say that the rule undermined the 2010 Affordable Care Act.
“Not only is any potential negative impact” from the Trump regulation “minimal,” Leon wrote, “but its benefits are undeniable.”
In August 2018, the Trump administration announced a regulation that would re-expand the availability of short-term medical insurance plans that are less expensive partly because they are not subject to the same kinds of regulations that make Obamacare-compliant insurance plans so expensive.
“We will deliver relief to American workers, families, and small businesses, who right now are being crushed by Obamacare, by increasing freedom, choice, and opportunity for the American people,” read a statement from the president alongside the White House’s announcement.
Opponents of the plans say that these less expensive plans undermine Obamacare and provide people with spotty coverage.
However, since Congress set the Obamacare individual mandate penalty at zero, Judge Leon ruled that the new rule simply helps people who cannot afford skyrocketing insurance costs.
“Because Congress effectively eliminated the individual mandate, relatively healthy Exchange enrollees are no longer choosing between paying ACA-compliant plan premiums or a fine. Their choice now is between paying ACA plan premiums and going uninsured altogether,” Leon continued. “By modestly (re)expanding the utility of less expensive [less-regulated] plans, the Rule aims to minimize the harm and expense that would result from these individuals opting to forgo health insurance in the face of rising premiums.”
To claims that the short-term plans would sabotage Obamacare, Leon added, “There is no indication in the evidence submitted that 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,” despite plaintiffs’ claims to the contrary.
The judge also ruled that the Trump administration was completely within the power afforded to it by federal law to issue the rule, writing, “Congress clearly did not intend for the law to apply to all species of individual health insurance” because the lawmakers who passed it “were not rigidly pursuing the ACA-compliant market at all costs, e.g., at the risk of individuals going without insurance altogether.”