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This week the Administration issued new guidance that will make it easier for states to ignore Affordable Care Act (ACA) rules and weaken the ACA Marketplace. The new guidance concerns state innovation waivers which would allow states to expand inadequate coverage such as short-term plans and Association Health Plans. As Politico reports, “Many health insurance experts warn the move could essentially create two health insurance markets – one for healthy people who opt for the cheaper plans and another for sicker patients who will face spiraling costs.”

We have extensively highlighted the dangers of expanding junk insurance. Such plans have high out-of-pocket costs; aren’t required to cover essential health benefits; may discriminate based on age or gender; and may impose lifetime and annual limits. These plans also weaken protections for people with pre-existing conditions. 

The New York Times quotes an anonymous administration official as saying “no waivers that would erode protections for pre-existing conditions will be approved.” But as the article also states, that particular “assurance is not found in the guidance.”

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