Health & Fitness
'Junk Insurance' Ban Good for California
California is the first state to limit these plans, and that will help small businesses
A new law blocking short-term insurance plans from being sold in California is perfectly timed for the state’s small businesses.
On Oct. 2, short-term health insurance plans that last up to 364 days went on sale nationwide thanks to a Trump administration rule that expanded the maximum length of these type of plans. Short-term plans are often referred to as “junk insurance” because they offer very limited coverage, yet it’s estimated 1.6 million people will purchase these plans by 2022. Nearly all of these customers would be younger and/or healthier, and without healthy people in the Affordable Care Act (ACA) marketplace to offset the costs of care for older or sicker people, premiums will rise drastically.
Fortunately, California lawmakers took a necessary step to protect the small businesses, small business employees and solo entrepreneurs who depend on the ACA for quality, affordable health care by banning short-term insurance plans. Hopefully more states will do the same to protect small firms.
