Sure, they’re less expensive for consumers, but short-term health policies have another side: They’re highly profitable for insurers and offer hefty sales commissions for brokers.

Driven by rising premiums for Affordable Care Act plans, interest in short-term insurance is growing, boosted by Trump administration actions to ease Obama-era restrictions and possibly make federal subsidies available to consumers to purchase them.

Short-term plans can be far less expensive than ACA plans because they set annual or lifetime payment limits. Most of these plans exclude people with pre-existing medical conditions, don’t cover prescription drugs and exclude in fine print some conditions or treatments. Injuries sustained in school sports, for example, often are not covered.

These plans can be purchased at any time throughout the year, which is different than plans sold through the federal marketplaces. The open enrollment period for those ACA plans in most states ended Dec. 15.

The rising demand for short-term plans is a boon for insurance brokers, who often see commissions on such policies hit 20 percent or more.

On a policy costing $200 a month, for example, that would translate to a $40 payment each month. By contrast, ACA plan commissions are often flat dollar amounts rather than a percentage of premium and can range from zero to $20 per enrollee per month.

“Customers are paying less, and I’m making more,” said Cindy Holtzman, a broker in Woodstock, Ga., who said she gets 20 percent on short-term plan sales.

Large online brokers also are eagerly eyeing the market.

Ehealth, one such firm, will “continue to shift our focus to selling short-term plans and non-ACA insurance packages,” CEO Scott Flanders told investors in October. The firm saw an 18 percent annual jump in enrollment in short-term plans this year, he added.

Insurers, too, see strong profits from plans because they generally pay out very little toward medical care when compared with the more comprehensive ACA plans.

Still, some agents like Holtzman have mixed feelings about selling the plans, because they offer skimpier coverage than ACA insurance. One 58-year-old client of Holtzman’s wanted one, but he had health problems. She also learned his income qualified him for an ACA subsidy, which currently cannot be used to purchase short-term coverage.

“There’s no way I would have considered a short-term plan for him,” she said. “I found him an ACA plan for $360 a month with a reduced deductible.” (A federal district court judge in Texas issued a ruling Dec. 14 striking down the ACA, which would among other things affect the requirements of ACA coverage and subsidies. The decision is expected to face appeal.)

Consequently, short-term insurers don’t have to pay as many medical bills, so they have more money left over for profits. In forms filed with state regulators, Independence American Insurance Co. in Ohio shows it expects 60 percent of its premium revenue to be spent on its enrollees’ medical care. The remaining 40 percent can go to profits, executive salaries, marketing and commissions.

A 2016 report from the National Association of Insurance Commissioners showed that, on average, short-term plans paid out about 67 percent of their earnings on medical care.

That compares with ACA plans, which are required under the law to spend at least 80 percent of premium revenue on medical claims.

Short-term plans have long been sold mainly as a stopgap measure for people between jobs or school coverage. While exact figures are not available, brokers say interest dropped when the ACA took effect in 2014 because many people got subsidies to buy ACA plans and having a short-term plan did not exempt consumers from the law’s penalty for not carrying insurance.

But this year it ticked up again after Congress eliminated the penalty for 2019 coverage. At the same time, the premiums for ACA plans rose on average more than 30 percent.

“If I don’t want someone to walk out of the office with nothing at all because of cost, that’s when I will bring up short-term plans,” said Kelly Rector, president of Denny & Associates, an insurance sales brokerage in O’Fallon, a suburb of St. Louis. “But I don’t love the plans because of the risk.”

The Obama administration limited short-term plans to 90-day increments to reduce the number of younger or healthier people who would leave the ACA market. That rule, the Trump administration complained, forced people to reapply every few months and risk rejection by insurers if their health had declined.

This summer, the administration finalized new rules allowing insurers to offer short-term plans for up to 12 months — and gave them the option to allow renewals for up to three years. States can be more restrictive or even bar such plans altogether.

Administration officials estimate short-term plans could be half the cost of the more comprehensive ACA insurance and draw 600,000 people to enroll in 2019, with 100,000 to 200,000 of those dropping ACA coverage to do so.

And recent guidance to states says they could seek permission to allow federal subsidies to be used for short-term plans. Currently, those subsidies apply only to ACA-compliant plans.

Granting subsidies for short-term plans “would mean tax dollars are not only subsidizing commissions, but also executive salaries and marketing budgets,” said Sabrina Corlette of Georgetown University Center on Health Insurance Reforms.

No state has yet applied to do that.

For now, brokers are focusing on getting their clients into some kind of coverage for next year. Commissions on both ACA and short-term plans are getting their attention.

After several years of declining commissions for ACA plans — with some carriers cutting them altogether a couple of years ago — brokers say they are seeing a bit of a rebound.

Among Colorado ACA insurers monthly commissions have ” gone from about $14 to $16 per enrollee to $16 to $18,” said Louise Norris, a health policy writer and co-owner of an insurance brokerage.

Rector, in Missouri, said an insurer that last year paid no commissions has reinstated them for 2019 coverage. For her, that doesn’t really matter, she said, because once carriers started reducing or eliminating commissions, she began charging clients a flat rate to enroll.

Norris noted that some states changed their laws so brokers could do just that.

At least one state, Connecticut, ruled that insurers had to pay a commission, which she thinks is protective for consumers.

“Insurance regulators need to step in and make sure brokers are getting paid,” said Norris, or some brokers, “out of necessity,” might steer people to higher-commission products, such as short-term plans, that might not be the best answer for their clients.

Her agency does not sell short-term or some other types of limited-benefit plans.

“I don’t want to have a client come back and say I’ve had a heart attack and have all these unpaid bills,” she said.

Kaiser Health News is a nonprofit news service covering health issues. It is an editorially independent program of the Kaiser Family Foundation that is not affiliated with Kaiser Permanente.

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If last Friday’s district court ruling that the Affordable Care Act is unconstitutional were to be upheld, far more than the law’s most high-profile provisions would be at stake.

In fact, canceling the law in full — as Judge Reed O’Connor in Fort Worth, Texas, ordered in his 55-page decision — could thrust the entire health care system into chaos.

“To erase a law that is so interwoven into the health care system blows up every part of it,” says Sara Rosenbaum, a health law professor at the George Washington University School of Public Health. “In law they have names for these — they are called superstatutes,” she says. “And [the ACA] is a superstatute. It has changed everything about how we get health care.” (That concept was developed by Abbe Gluck, a professor at Yale Law School.)

O’Connor’s decision is a long way from implementation. He still must rule on several other aspects of the suit brought by 18 Republican attorneys general and two GOP governors. And a group of state Democratic attorneys general has promised to appeal O’Connor’s decision, which would send it to the 5th Circuit Court of Appeals and, possibly, the U.S. Supreme Court. The high court has rejected two previous efforts, in 2012 and 2015, to find the law unconstitutional.

Meanwhile, here are five ways that eliminating the ACA could upend health care for many, if not most, Americans:

Millions could lose coverage directly

More than 20 million Americans who previously were uninsured gained coverage from 2010 to 2017. Some of that was due to an improving economy, but many also gained the ability to buy their own coverage, thanks to the law’s federal subsidies to defray the cost of insurance. Other provisions of the Affordable Care Act played a significant role, including its ban on restrictions for people with pre-existing medical conditions, expansion of the Medicaid program to more low-income adults and allowing adult children to stay on their parents’ health plans until reaching age 26.

If the law were reversed, federal funding for Medicaid and individual insurance subsidies would stop, and insurers could once again refuse coverage to or charge more for people who have health problems.

Fundamental changes to the health care system could be stymied

The impact of eliminating the ACA could be felt well beyond those people who are the direct beneficiaries of the law.

Gail Wilensky, who ran the Medicare and Medicaid programs under President George H.W. Bush, says such a change “would be very disruptive because so much [of the ACA] has affected the way health care is organized and delivered, and the way insurance is provided.”

For example, says Rosenbaum, the increase in health coverage meant that “suddenly it became possible for health care systems to care for, by and large, an insured population.”

Previously many hospitals, doctors and other health providers spent considerable time and effort figuring out how to treat — without going broke —people who lack insurance.

After the ACA kicked in, these providers began to worry less about whether they would get paid. And the federal government started pushing them to create new initiatives aimed at improving the quality of care.

Those include, for example, measures that base some federal payments on patients’ health outcomes rather than on each individual procedure performed. Under the ACA, the government also encouraged strategies that improve health across the U.S. — like improving the availability of healthful food, bicycle paths and preventive care.

If millions of people lost insurance, Rosenbaum says, those health providers “would have to go back to wondering how they will be able to pay their bills.”

Medicare and Medicaid would be dramatically altered

The popular Medicare program, which covers an estimated 60 million seniors and people with disabilities, was a major focus of the ACA.

Elimination of the federal health law would take away some popular benefits the ACA conferred — everything from free preventive care to the closing of the “doughnut hole” in Medicare’s prescription drug coverage. The doughnut hole refers to a coverage gap that had previously exposed large numbers of beneficiaries to thousands of dollars in drug costs.

The law also changed the way Medicare paid for hospital, home health and outpatient care. Many current payment policies are based on authority provided by the ACA, and if it went away, Medicare would have to rewrite those payment regulations. Millions of beneficiaries belong to accountable care organizations that were created under the health law, and it is unclear how their care would be affected.

The biggest change in the Medicaid program would be the elimination of the expansion of coverage. Loss of the ACA would also roll back a 23-percentage-point boost in Medicaid prescription drug rebates, which has saved states billions of dollars, according to Cindy Mann. She ran Medicaid under President Barack Obama and is now a partner at the health consulting firm Manatt Health.

The ACA required states to calculate Medicaid eligibility differently — changing what counts as income — so all the work states did to alter their information systems would have to be recalculated, she says.

Wide array of health programs at risk

Shorthand descriptions of the health law often stop at its provisions providing consumer protections and expanding Medicaid. But the ACA included sweeping changes to other parts of the health system that rarely get mentioned.

For example, it created the first pathway for Food and Drug Administration approval of generic copies of expensive biologic drugs, by incorporating the Biologics Price Competition and Innovation Act of 2009. Biologic drugs are more difficult to reproduce than other types of medications.

Also hitching a ride on the ACA was a long-delayed bill providing permanent spending authority for programs provided by the Indian Health Service, which serves Native Americans.

And the law included a series of grant programs to help train more health professionals who would be needed to treat the millions of newly insured Americans.

All those programs would be thrust into doubt by invalidating the law.

Loss of the ACA also would impact a popular program that predates Obamacare: the Health Insurance Portability and Accountability Act, or HIPAA.

The ACA’s protections for pre-existing conditions — banning insurers from charging people with health problems higher premiums or refusing to sell to them altogether — built on similar protections for people with employer insurance. Congress included those protections in HIPAA, which was enacted in 1996. And far more people are touched by HIPAA than by the ACA, because far more people get health insurance through their employer than through the individual market.

However, when Congress wrote the ACA, it incorporated HIPAA safeguards into the pre-existing-condition provision. That means if the ACA is struck down, the HIPAA protections might disappear as well.

Even the Trump administration’s health agenda could be compromised

President Trump has railed against the health law, but his Department of Health and Human Services has a priority list that relies in some significant ways on the continued existence of the ACA.

For example, efforts to address the opioid epidemic — one of the administration’s top health challenges — could be seriously set back if the Medicaid expansion were to end. Medicaid is the largest single payer for mental health and substance abuse treatments.

Much of the president’s effort to limit drug prices flows through the Center for Medicare & Medicaid Innovation, which was created by the ACA and would lose its legal authority if the law became invalid.

Similarly, the administration is using this center to pursue “bundling” payments for certain surgical procedures — an effort to try to get more value for dollars spent.

Kaiser Health News, a nonprofit news service, is an editorially independent program of the Kaiser Family Foundation and not affiliated with Kaiser Permanente. KHN senior correspondent Phil Galewitz contributed to this story.

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U.S. District Judge Reed O’Connor has a history of siding with Republicans on ideologically motivated lawsuits. His ruling last week, in which he sided with the GOP on a challenge to the Affordable Care Act, was not a one-off.

In fact, critics say, his history is ultimately why that case was before him in the first place.

By all accounts, O’Connor’s ruling is sweeping. It says the entire health care law became invalid when Congress zeroed out, in 2017, the tax penalty for Americans who don’t have health insurance — a penalty that had been tied to what’s known as the law’s individual mandate that nearly everyone have insurance.

“I think he went too far in rejecting the entire law,” says Josh Blackman, a conservative legal scholar and professor at the South Texas College of Law in Houston. “I think he could have stopped short and simply severed the Obamacare mandate.”

While O’Connor’s decision may seem a bit extreme to some legal scholars, it wasn’t surprising.

Justin Nelson, a law professor at the University of Texas, Austin, says if you know anything about O’Connor’s past rulings, this was predictable.

“In case after case,” Nelson says, “what he has shown is that he has tended to side with the Republican attorneys general who are bringing ideological suits.”

Nelson recently ran an unsuccessful campaign to oust Texas Attorney General Ken Paxton, who led this multistate legal challenge to the health care law. Nelson says Paxton and the other Republican attorneys general have filed lawsuits in the U.S District Court for the Northern District of Texas because they know there’s a good chance they’ll get O’Connor as the judge.

“Judge O’Connor has been the go-to judge for Ken Paxton and Republican attorneys general who want to file ideological suits in any court across the country,” Nelson says. “Reed O’Connor is their best shot to get a ruling that they like.”

O’Connor, who did not respond to NPR’s requests for comment, was a Republican staffer on Capitol Hill before he was nominated to the federal bench by George W. Bush in 2007. So far, he has had to weigh in on at least a couple of contentious issues.

For example, O’Connor is known for striking down an Obama-era rule that protected transgender students. In that case he also sided with Paxton, who filed that legal challenge.

“They’ve done this over and over again on the hope that Judge O’Connor would rule on behalf of an ideological agenda,” Nelson says. “And I don’t think that is proper. I don’t think that is right.”

Paxton has filed lawsuits in other courts, too. He filed challenges to Obama-era immigration laws in a court in South Texas, which also has a reliably conservative judge on the bench.

However, Blackman believes criticism of this practice is “overblown.”

“All lawyers generally file the case where it leads to the best chance of success,” Blackman says. “And to the extent that [there’s a] criticism — that’s criticism of the attorney general and not of the judge. The judge doesn’t control which cases come to him.”

Furthermore, because O’Connor is getting a lot of ideological lawsuits brought to him, it’s making his voting record more controversial, Blackman adds.

“I think by virtue of the attorney generals’ form selection,” he says, “Judge O’Connor’s had a greater share than average of hot-button issues.”

However, Blackman says he is concerned that criticisms of controversial opinions are increasingly shifting toward the judges who issue the opinions — instead of toward the decisions themselves.

“President Trump does this all the time,” Blackman says. “Politicians do it all time. And usually this happens to Supreme Court justices, but here it is being done to a district court judge in Fort Worth — who, 99 percent of his docket no one will even know about.”

No matter how controversial O’Connor’s ruling on the health care law, Blackman says, the decision over the Affordable Care Act will now pass to another judge, as the case moves on to a higher court.

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