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Previously, under the Affordable Care Act, short-term plans were limited to three months.

Under the Trump administration's rule, these short-term plans will be renewable for up to three years.

Short-term, limited-duration insurance in the past has been aimed mainly at people who are between jobs or have other short-term needs, but the Trump administration said it wants to give consumers more choices in the individual market risk pools. These plans are meant as a short-term option for consumers who lack coverage from an employer or are contractors, but experts warn these plans also can deny coverage of existing medical conditions.

Most short-term plans don't cover maternity care, outpatient prescription drugs, and substance abuse or mental health treatment, or they impose tight limits on these benefits; they can refuse to pay for treating conditions they consider pre-existing.

Officials unveiled a final rule that will make it easier to obtain coverage through short-term health insurance plans, which don't have to adhere to the law's consumer protections.

"We make no representation that it's equivalent coverage", Jim Parker, a senior adviser at HHS told the Associated Press.

They are suing to force the administration to restore the funding that was slashed for outreach and enrollment assistance, extend the 2019 open enrollment period, and steer people towards comprehensive ACA plans and away from skimpy short-term plans that do not cover pre-existing conditions.

Azar said the new plans are tailor-made for the 'gig economy'.

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The cities of Baltimore, Chicago, Columbus and Cincinnati filed the lawsuit in federal court in Maryland, arguing that Trump's actions against the Affordable Care Act violate the Constitution's provision that the president "shall take care that the laws be faithfully executed".

As more healthy people hop on cheaper short-term plans, the overall make-up of the ACA markets will be sicker and more expensive to cover for insurers. But there's no federal guarantee of renewability. This could have the effect of driving premiums slightly higher on the ACA exchanges, because healthier people will leave the market, according to the CBO.

Supporters of the new rules say the short-term plans won't affect the ACA market as much as critics fear because the plans will mainly appeal to those consumers already sitting on the sidelines, or those who don't get a subsidy.

The pair of new rules carries out an executive order President Trump signed in October, directing agencies to broaden access to these two small niches in the insurance market to promote "a health-care system that provides high-quality care at affordable prices for the American people". All have warned that consumers with bare-bones plans would be stranded when they need care - and that the defection of low-priced customers from ACA marketplaces would drive up prices for those who remain. According to a report by the National Association of Insurance Commissioners, the policies paid out an average 55 percent of their premiums in actual health care previous year.

But President Donald Trump has been enthusiastic. They usually exclude coverage for critical health services that consumers have come to expect their policies to cover.

More than 9,000 people and organizations commented on the rule, since February when it was first proposed.

Health and Human Services Secretary Alex Azar, and Centers for Medicare & Medicaid Services Administrator Seema Verma are also named as codefendants with the president in the 130-page suit. According to court filings, this directly violates a clause in the USA constitution, which states the president and their administration must "take care that the laws be faithfully executed". "The proposed rule fails to adequately protect our community". But they may have higher out-of-pocket costs, as well as yearly or lifetime limits on coverage forbidden by the ACA.