Biden administration finalizes rule limiting use of short-term health plans

The Biden administration announced Thursday that it has finalized a new regulation that curbs the use of short-term health insurance plans that do not comply with the Affordable Care Act, reversing the Trump administration's move to give consumers greater access to cheaper but more succinct services. plans.

Under the new rule, short-term plans will only be able to last 90 days, with consumers being able to extend a one-month extension.

In 2018, the Trump administration issued a rule that allows plans to last just under a year, with the possibility of renewing them for a total duration of up to three years. Previously, under Obama-era policy, plans could last no longer than three months.

The plans, often with lower premiums than those on Affordable Care Act marketplaces, do not have to cover people with pre-existing conditions. They are also exempt from the health law's requirement that plans offer a minimum set of benefits, such as prescription drug coverage and maternity care.

Democrats deride so-called short-term, limited-duration plans as “junk” insurance, and the Obama-era policy was intended to ensure that healthy consumers couldn't use that option to circumvent the Affordable Care Act marketplaces, leaving a sicker pool. of customers who enroll in the comprehensive plans offered by the health law.

The White House proposed the new rule as a way to strengthen markets. In a briefing with reporters on Wednesday, Neera Tanden, President Biden's domestic policy adviser, said that 45 million Americans are now covered by marketplaces or Medicaid expansion under the Affordable Care Act. More than 20 millions of people signed up for plans on marketplaces during the last open enrollment period.

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

Supporters of short-term plans have said the less expensive options are suitable for workers who move from job to job or those who 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 forgotten and excluded men and women from the current system.”

But critics of the plans have warned that insurers can deceive 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 moved to limit the sale of the plans. Democratic lawmakers have urged the Biden administration to rescind the regulation, and the administration issued a proposed rule to do so last summer.

In its announcement Thursday, the White House cited a Montana man who had racked up more than $40,000 in health care bills because his cancer was considered a pre-existing condition, and a Pennsylvania woman who had an amputation and received about $20,000. dollars in bills that his plan didn't cover.

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

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