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Winter Storm Avery takes lives, puts the brakes on commutes across the Northeast. Also on our Friday rundown: A first-of-its-kind report calls for policies to ease transitions of young people living in foster care. And "got gratitude" this holiday season? It could benefit your health.

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Final Rule Allowing Sale of “Junk Insurance” Released

A new federal rule could allow health insurers to exclude people who are ill or have pre-existing conditions from coverage. (pxhere)
A new federal rule could allow health insurers to exclude people who are ill or have pre-existing conditions from coverage. (pxhere)
June 20, 2018

NEW YORK - The Trump administration has cleared the way for an unprecedented expansion of inexpensive health insurance that critics say will drive prices up for more comprehensive plans.

The new federal regulation allows small employers to join together to create so-called "association health plans," which are exempt from some critical insurance safeguards. According to Cheryl Fish-Parcham, director of access initiatives for the health-care advocacy group Families USA, such plans often end up being so limited that they're "insurance" in name only.

"They don't have to provide a minimum value of coverage," she said. "They don't have to provide mental-health benefits; they might not have to provide maternity benefits. So, there are really limited benefits being offered in these plans."

The administration has said the plans will spur competition in the insurance market, but critics say the new rule will lead to more people being denied coverage and more medical bankruptcies. Fish-Parcham said these plans also are allowed to discriminate against people who are sick or who have pre-existing medical conditions.

"This segments the market into a market for the healthy and a market for the sick," she said, "and there are many ways that the market for the sick becomes even more expensive."

She said Association Health Plans are more difficult to oversee, which opens the door for unscrupulous companies to sell very low-cost plans that don't actually cover medical claims. States may be able to step in to weed out the companies that are defrauding consumers, she said.

"Unfortunately, that's going to take resources that states may not have," she said. "Their insurance departments will have to step up quite a lot to oversee these plans."

The new rule was drafted by the Labor Department under an executive order signed by President Donald Trump on Oct. 12. Its text is online at whitehouse.gov.

Andrea Sears, Public News Service - NY