Biden cuts duration of short-term health plans

The Biden administration plans to roll back a cornerstone of former President Donald Trump’s health policy agenda − short-term health insurance.

Short-term health insurance plans offer limited benefits and less expensive monthly premiums but deny coverage for previously existing medical conditions.

Under the new rule finalized last week, the Biden administration will cut the duration of short-term health insurance plans to three months with a one-month renewal option. Companies that sell short-term plans must also provide consumers with a disclaimer detailing the limits of services and amounts the plans cover. The rule reverses a 2018 Trump administration policy that allowed consumers to remain on short-term plans for up to three years.

These plans were designed to offer a short-term option for consumers who do not have coverage from an employer or other source. However, experts warn they offer skimpy coverage and can leave consumers with unpaid medical bills.

The White House referred to these plans as “junk insurance,” noting in a fact sheet that the new rule would ensure Americans aren’t “scammed into low- quality coverage that leaves consumers on the hook for thousands of dollars in medical bills” and put in situations where they are denied care.

Short-term plans don’t offer the same protections as Affordable Care Act plans, which require insurers to cover a range of standard benefits such as emergency, maternity and mental health care services. And unlike short-term plans, Obamacare plans cannot deny coverage based on a person’s previously existing medical conditions.

Biden’s new rule, which takes effect June 17, is a return to the Obama administration’s policy, which limited the sale of short-term plans to 90day periods as a stopgap between more robust plans.

Health and Human Services Secretary Xavier Becerra said the rule “is cracking down on junk insurance plans to help consumers make informed choices and avoid mistakenly paying for a plan that does not provide them the coverage or protection they expect.”

Sabrina Corlette, founder and codirector of the Center on Health Insurance Reforms at Georgetown University’s McCourt School of Public Policy, said the policy aims to inform consumers about differences between short-term plans and more robust coverage offered through the ACA.

“It’s a clear repudiation of the Trump administration’s policy with respect to short-term plans,” Corlette said.

The restriction on short-term insurance plans comes as the Biden administration works to shore up the Affordable Care Act federal and state marketplaces, which showed record enrollment – with more than 21 million people signing up this year. Most working-age people get health insurance through their employers while older, low-income and disabled Americans often get covered through the government health insurance programs Medicare and Medicaid.

Advocates of short-term plans say they provide options for healthier adults who want more affordable choices for health insurance.