US judge strikes down rule allowing 'skimpy' health insurance plans
Judge giving a verdict (Shutterstock)

A federal judge on Thursday stuck down a Trump administration rule aimed at enabling millions of Americans to buy skimpy health insurance plans that do not comply with key Affordable Care Act requirements - part of administration efforts to chip away at the healthcare law.

Judge John Bates of the U.S. District Court for the District of Columbia found the rule “is clearly an end-run around the ACA,” commonly called Obamacare, the signature domestic achievement of former Democratic President Barack Obama.

The rule, put forward by the U.S. Department of Labor, would have allowed small businesses and those who are self-employed to band together and buy lower-cost health insurance policies, similar to large employers.

In the suit filed by 11 states and the District of Columbia, the judge found the department unreasonably expanded the definition of employers to include groups without any real commonality of interest as well as business owners without employees.

“Accordingly, these provisions are unlawful and must be set aside,” Bates said in the ruling.

Obamacare requirements include mandatory coverage for a set of 10 essential health benefits, such as maternity and newborn care, prescription drug costs and mental health treatment

Health providers, insurers and medical groups had warned that skimpy plans could drive up premiums and make insurance unaffordable for some people by siphoning off healthy consumers who want cheaper coverage, leaving behind a sicker patient pool with higher medical costs in Obamacare plans.

Republicans have so far failed to repeal and replace Obamacare, a top 2016 campaign promise of President Donald Trump.

But the Trump administration stepped up its assault on the healthcare law with a Justice Department letter to the 5th U.S. Circuit Court of Appeals filed on Monday, saying it backed a federal judge’s ruling in December that the healthcare law violated the U.S. Constitution because it required people to buy health insurance.

About 11.8 million consumers nationwide enrolled in 2018 Obamacare exchange plans, according to the U.S. government’s Centers for Medicare and Medicaid Services.

Reporting by Deena Beasley in Los Angeles; Editing by Peter Cooney