Biden overturns Trump-era limits on short-term health plans

President Joe Biden wants meager short-term health coverage to last no longer than four months, overturning a Trump-era regulation.

HHS, the Treasury Department and the Labor Department released proposed rules on Friday that crack down on short-term, limited-term health plans, which offer cheap but sparse coverage that Democrats call “unwanted insurance.” . The rule, which aims to protect consumers and bolster the Obamacare exchange, would undo a 2018 Trump-era regulation and satisfy liberal lawmakers and patient groups who have demanded the administration act since its earliest days. to the White House.

“The short-term plans are meant to provide temporary coverage as people move from one source of coverage to another,” White House domestic policy adviser Neera Tanden said in a call with reporters. THURSDAY. “Under the previous administration, however, companies were able to take advantage of loopholes and sell unwanted insurance for much longer than expected.”

The announcement, first reported by POLITICO, comes as Biden is set to deliver a speech on Friday touting his health care agenda, which will include efforts to clamp down on junk fees and other actions to reduce health care costs.

What’s in the rule: If finalized, short-term health plans will last for three months and can only be renewed for an additional month.

The Trump-era rule allowed these types of plans to last up to one year and be renewed for up to three years. A 2016 rule under President Obama limited short-term plans to three months.

Short-term plans don’t have to meet the same requirements as a health insurance plan sold on the Obamacare insurance exchanges. These requirements may include coverage for pre-existing conditions and certain essential health benefits such as prescription drugs.

Consumers currently enrolled in short-term plans will be grandfathered under the old rules, according to a senior administration official who was granted anonymity to discuss details of the Biden plan.

The rule does not limit the sale of short-term plans during Obamacare’s open enrollment as some Democratic lawmakers had hoped.

When asked on Thursday why it took several years to reach this milestone, a senior administration official replied that “we have been busy with health care. We saw a record number of registrations in ACA coverage. »

What else did they announce? The administration also rolled out guidelines intended to close a loophole in the No Surprises Act, which Congress passed in 2020 to prevent patients from receiving surprise bills when treated by out-of-network providers.

HHS officials are concerned that health insurers are relying on certain loopholes such as contracting with a hospital, but say it is technically not part of the network, according to a White House fact sheet.

The guidelines state that the move is “not authorized by federal law: the health services provided by these providers are either out-of-network and subject to surprise billing protections, or they are in-network,” the fact sheet says. .

Administration officials are also concerned that consumers are being charged a “facility fee” for work done outside of a hospital, such as in an affiliated doctor’s office. A plan and a hospital should educate consumers about these charges.

Several agencies are also interested in learning more about the impact of third-party medical credit cards. HHS, the Treasury and the Consumer Financial Protection Bureau want information about the use of these cards, which have extremely high interest rates, according to senior administration officials during Thursday’s call with reporters.

The administration released new research on Friday outlining the impact of the Inflation Reduction Act’s cap on out-of-pocket Part D expenses. for nearly 19 million registered in Part D.

“Of this population, the report finds that nearly 1.9 million enrollees are expected to save at least $1,000 in 2025,” a statement from the report said.

Leave a Comment