The Biden administration is aiming to tighten regulations on short-term health insurance plans. These plans, according to the administration, often result in patients facing significant medical expenses.
Biden Pushes Back Short-Term Health Insurance Plan
As part of a series of measures aimed at reducing healthcare costs, the proposed rule, announced on Friday, would restrict the duration of these short-term health insurance plans to three months, with the possibility of a one-month extension. It would also mandate that plans provide clear explanations of their benefits, which typically offer less comprehensive coverage compared to other policies, CNN reported.
This proposal represents a significant reversal of former President Donald Trump’s 2018 short-term health insurance plans expansion, which extended their duration to nearly a year and allowed for renewals totaling up to 36 months. The Trump administration’s decision was one of several attempts to chip away at the Affordable Care Act.
Short-term health insurance plans are not required to comply with the consumer protections outlined in the Affordable Care Act. For instance, they can opt not to provide comprehensive coverage and can even discriminate against individuals with pre-existing conditions.
While the Trump administration positioned short-term health insurance plans as a more affordable alternative to ACA policies due to their limited benefits, the Biden administration has referred to them as “junk insurance.”
Short-Term Health Insurance Plan Effects
Supporters of the Affordable Care Act also worry that short-term health insurance plans may attract younger, healthier individuals away from ACA policies, potentially leaving a greater proportion of older, sicker Americans in marketplace plans. This shift could lead to premium increases.
The proposed restriction on short-term health insurance plans is one of the latest steps taken by the Biden administration to reduce healthcare costs and address surprise fees. These actions are part of the administration’s broader “Bidenomics” agenda, which aims to support middle- and working-class Americans. President Joe Biden is expected to discuss these measures in a speech on Friday.
Additionally, the administration announced new guidelines to strengthen regulations protecting patients from unexpected medical billing. The guidelines clarify that federal law prohibits health insurers and hospitals from entering contracts that employ creative loopholes to claim providers are not technically in-network.