Biden administration finalizes rule restricting use of short-term health insurance

The Biden administration announced Thursday that it has approved a new regulation restricting the use of short-term health insurance that does not comply with the Affordable Care Act, reversing a move by the Trump administration to give consumers more access to cheaper, but tighter offers to enable plans.

Under the new rule, the short-term plans can only last for 90 days, with the option for consumers to extend for a month.

In 2018, the Trump administration issued a rule that allowed the plans to last just under one year, with the option to extend for a total term of up to three years. Previously, under Obama-era policies, plans could last no longer than three months.

The plans, which often have lower premiums than those offered on Affordable Care Act marketplaces, are not required to cover people with pre-existing conditions. They are also exempt from the health law’s requirement that plans provide a minimum level of benefits, such as: B. Prescription drug coverage and maternity care.

Democrats deride the so-called short-term, time-limited plans as “junk” insurance, and Obama-era policies were intended to ensure that healthy consumers couldn’t use that option to bypass the Affordable Care Act’s marketplaces and create a sicker pool legacy of customers who enroll in comprehensive plans offered under the health care law.

The White House framed the new rule as a way to strengthen marketplaces. Neera Tanden, President Biden’s domestic policy adviser, said in a briefing with reporters on Wednesday 45 million Americans were now covered through the marketplaces or the expansion of Medicaid under the Affordable Care Act. More than 20 million people signed up for plans on the marketplaces during the most recent open enrollment period.

“President Biden is not taking his foot off the gas,” Ms. Tanden said.

Proponents of the short-term plans said the cheaper options are good for workers who are changing jobs or can’t afford a marketplace plan. Alex M. Azar II, who served as Secretary of Health and Human Services under President Donald J. Trump, said in 2018 that the plans “can provide a much more affordable option for millions of the forgotten men and women left out of the current system.” .” .”

But critics of the plans have warned that insurers could mislead consumers who sign up for them, including people who may be eligible for free coverage through the Affordable Care Act marketplaces. After the Trump administration issued its rule in 2018, some states took action on their own to restrict sales of the plans. Democratic lawmakers urged the Biden administration to repeal the regulation, and the administration issued a proposed rule last summer.

In its announcement Thursday, the White House cited a man in Montana who racked up more than $40,000 in health care costs because his cancer was considered a pre-existing condition, and a woman in Pennsylvania who underwent an amputation and incurred about $20,000. Dollars in bills your plan would not cover.

The new regulation also requires insurers to provide a disclaimer explaining what the short-term plans cover.

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