The Obama administration had limited short-term individual plans to just three months without the option of renewal, in part to prevent the plans from siphoning off healthy people from the exchange markets.
The Trump administration maintains that 87 percent of exchange enrollees this year are receiving a tax credit, which lowers their net premiums. As result, they expect that fewer than a quarter million out of nearly 11 million exchange members will opt to switch to cheaper short-term plans.
Yet, Centers for Medicare and Medicaid actuaries estimated that with the repeal of the individual mandate penalty, 1.4 million people would sign up for coverage in longer-duration short-term plans in 2019, and roughly 600,000 would come from the pool of people who are now enrolled in exchange plans.
"We are projecting as many as 5 million short-term policies could be sold next year," said Scott Flanders, CEO of eHealth, which began selling its own co-branded short-term plans earlier this year in anticipation of the rule change.
Others are now planning to ramp up their short-term offerings for 2019. When eHealth surveyed insurers about short-term plans in July, 73 percent said they were planning to offer coverage next year — up from 42 percent when the proposed rules were announced in February.
"We think they are underestimating how much visibility will be brought to this market and players like UnitedHealth and others start innovating new product offerings, given the extended duration," Flanders said.
The administration itself is keen to promote its efforts to provide alternatives to Obamacare plans and will likely provide information about short-term plans on Healthcare.gov this fall.
"I think it's a recipe for a lot of consumers not getting good information about what is right for them and their families ... to protect them from financial harm," said Corlette.
EHealth already offers consumers calculators to help them decide which coverage will be most cost-effective. He expects insurers to offer a wider variety of short-term plans with different coverage options and price points, which will likely result in higher call volumes from people looking for help sorting through their options.
"Anyone who can qualify for a subsidy will be funneled down the path of an ACA-compliant plan — major medical is still preferred to even the most robust short-term products that we've seen so far under development," said eHealth's Flanders.
But for those who are healthy and receive too much federal assistance, he thinks longer duration short-terms plans could help fill a big need for more affordable options.