Short-term plansare considerably cheaper than those operating under ACArequirements because they don't have to cover the ACA's 10essential benefit categories. (Photo: Shutterstock)

Another day, another ACA lawsuit.

Seven health care industry and advocacy groups have brought suitagainst the Trump administration to keep short-term health plans from beingexpanded.

As reported by Modern Healthcare, the groups, including theAssociation for Community Affiliated Plans and the AmericanPsychiatric Association, are challenging the rule from theadministration that would expand the availability of short-termplans—which don't comply with the consumer protection rules in the AffordableCare Act—on the grounds that the rule violates the intend of theACA to make “low-cost comprehensive insurance available” toAmericans.

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This is just the most recent lawsuit against actions taken bythe administration to cut back on or circumvent ACA coverage rulesand insurance expansion. According to Modern Healthcare, othercourt actions would “halt the implementation of Medicaid workrequirements, stop the expansion of association health plans,preserve contraceptive coverage, and overturn actions denyingcost-sharing and risk-corridor payments to insurers.”

“We're very concerned that some plans in the ACA market may dropout because this will draw low-risk people out of the marketplaceand increase unfair competition from plans that aren't subject tothe same rules,” Margaret Murray, CEO of the Association forCommunity Affiliated Plans, representing safety-net insurers, toldModern Healthcare.

In a statement, a Centers for Medicare and Medicaid spokeswomansaid the short-term plans “are an important option for people incertain circumstances and the Trump administration is committed todelivering greater access to more affordable choices to the men andwomen left out by Obamacare.”

The rule, which would take effect on October 2, would let peoplebuy short-term plans that only last 364 days—but it would also letinsurers renew such plans for up to 36 months. The plans areconsiderably cheaper than those operating under ACA requirementsbecause they don't have to cover the ACA's 10 essential benefitcategories, which include mental healthcare, maternity care andprescription drugs. They also can deny customers coverage becauseof preexisting conditions or charge higher prices based on age,heath status and gender—and without caps on out-of-pocketexpenses.

The seven groups allege that the rule would transform the ACA'snarrow exemption for short-term plans “into a loophole that wouldpermit the creation of a parallel individual insurance marketconsisting of plans that are not subject to the ACA's consumerprotection standards. This result cannot be reconciled with thetext, structure, or purpose of the ACA.”

They also say that neither Health and Human Services, theDepartment of Labor nor the Treasury Department have provided any“well-reasoned justification” to eliminate the ACA's 2016 rule thatlimited short-term plans to three months, from the previous limitof 364 days. In addition, the suit alleges that those agenciesfailed to disclose when the new rule was proposed that theyintended to let short-term plans be renewed at all, much less for36 months.

Abbe Gluck, a health law professor at Yale University whosupports the ACA, told Modern Healthcare that the new rule'sproposed changes and extensions to short-term insurance are “not areasonable interpretation of the law.”

The fear is that so many consumers will switch to the cheapershort-term plans that the stability of the ACA marketplace will bethreatened, with premiums being driven up as only older and sickerconsumers remain. But additional challenges to Trump administrationchanges to the law await.

“What we saw throughout the Obama administration was dozens oflawsuits filed by right-wing groups trying to eviscerate the ACA,”Tim Jost, an emeritus law professor at Washington and LeeUniversity who supports the law, said. “Now things have flipped.There will be a new lawsuit every time the Trump administrationdoes something to undermine the ACA. He keeps saying he's trying todestroy it. It's not surprising people are taking himseriously.”

Read more:

• GOP candidates sprinting away from ACArepeal
• Trump administration won't defendObamacare
• 10 highlights of the short-term health planregs