WASHINGTON — President Joe Biden is cracking down on what the White House calls “junk” health insurance plans — namely, less robust, short-term coverage that the Trump administration expanded as a cheaper alternative to Obamacare plans. .
Biden will announce draft regulations on Friday that, when finalized, would limit temporary plans to four months instead of the current maximum of three years. It would also require more disclosure about coverage limits.
“This rule would help make those plans fairer and ensure consumers know what they’re getting when they buy insurance,” said White House domestic policy adviser Neera Tanden. “When they don’t know what they’re getting and getting these gigantic bills, they can feel like it’s a scam.”
Biden is also expected to detail steps to make it harder for health care providers to circumvent a recent law protecting consumers from surprise medical bills and announce that the administration is studying the growing use of medical credit cards.
The White House says the actions build on the president’s crusade against various types of ‘junk fees’ – including banking, travel and live entertainment – as well as his promise to cut health care costs. health.
Biden will tout a new federal estimate showing one in three Medicare beneficiaries will save an average of $400 a year on prescription drugs when a cap on out-of-pocket spending begins in 2025.
Here’s what to expect:
Limit “junk” insurance
Biden wants to reverse the Trump administration’s expansion of short-term health insurance plans that don’t have to meet Affordable Care Act requirements, such as coverage for pre-existing conditions. The Obama administration had limited the sale of short-term plans to 90-day periods, intending to use them when people move from one source of coverage to another, such as when they’re between jobs. .
But as the Trump administration sought ways to “repeal and replace” the ACA, the maximum term was extended to three years. Former Health and Human Services Secretary Alex Azar said at the time that the plans were a more affordable option that could appeal to temporary contractors and workers in the gig economy who do not benefit from health insurance through employment.
The Biden administration argues that the plans too often leave families surprised with thousands of dollars in bills when their health care is not covered.
The Congressional Budget Office estimated in 2019 that unsuccessful legislation to block Trump’s expansion would have resulted in 1.5 million fewer people buying short-term plans each year. Of those, more than 500,000 would have purchased comprehensive Obamacare plans, a small number would have been covered by an employer, and about 500,000 would have left without insurance.
Under Biden’s proposed change, anyone currently enrolled in a short-term plan could stay there for the original coverage limit, but would be subject to the new rules when their plan expires.
Reinstating a hard limit on short-term plans is one of the latest elements of Biden’s agenda to reinvigorate the ACA, according to Larry Levitt, executive vice president for health policy at KFF, a nonpartisan health research organization. .
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Closing “loopholes” to stop surprise medical bills
The bipartisan “No Surprises Act” that came into effect last year was intended to protect patients from unexpected bills when a doctor or other provider was not part of their insurer’s network.
But Tanden says some plans and providers are trying to get around the rules by changing the terms they use in their contracts to argue, for example, that a hospital isn’t technically “networked.”
“Frankly what they’re doing is playing with the system,” she said. “It’s not allowed and as our guidance will describe, it must stop.”
Health care services will either have to be covered by the protections of the “no surprises act” or, if considered part of the network, be subject to the Affordable Care Act’s annual limit on the amount that can be paid. a consumer has to pay out of pocket.
Medical Credit Card Survey
Administration officials said they have many questions about the growing use of third-party medical credit cards and loans used to pay for care. The cards often include interest rates and deferred interest features that can make them more expensive, according to the White House. Also, consumers may not fully understand the terms.
A joint review by the Consumer Financial Protection Bureau, the Treasury Department and the Department of Health and Human Services will examine how their products are sold and how debt is collected.
Reduce Medicare drug costs
While pushing for new actions, Biden is also touting savings for seniors through health care, climate change and last year’s tax bill. Under the Inflation Reduction Act, out-of-pocket costs for Medicare’s prescription drug plan are capped at $2,000 per year beginning in 2025.
Nearly 19 million seniors and other Medicare beneficiaries will save an average of $400 a year, according to the Department of Health and Human Services. The nearly 2 million enrollees with the highest drug costs will save an average of $2,500 per year.
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This article originally appeared on USA TODAY: Biden rolls back expansion of Trump’s ‘junk’ health plans