The Biden administration has begun easing one of the Trump administration’s signature health care policies by seeking to impose stricter regulations on short-term, term health plans. .
The Departments of Health and Human Services, Labor and Treasury announced a proposed rule on Friday that would limit short-term policies to a three-month period. This would essentially roll back pre-2018 regulations, when President Donald Trump’s administration issued a regulation allowing consumers to keep short-term plans for up to 364 days and renew them for up to 364 days. three years. The draft new regulation to limit short-term, term health insurance is part of a group of health policy initiatives President Joe Biden announced Friday.
“Today’s announcement protects patients from junk health insurance,” HHS Minister Xavier Becerra said in a news release on Friday.
In addition to shortening the time that policyholders can maintain this form of coverage, the proposed rule would not allow re-enrollment of the same plans, although consumers would be allowed to purchase consecutive policies. various short-term contracts for up to 36 months. Under the Biden administration’s proposal, the short-term, limited-term plans would once again act as a gap insurance for consumers among other forms of coverage, such as health benefits. according to work.
The Trump administration bills easing rules governing short-term health insurance as a means to provide lower-cost coverage options to compete with comprehensive health plans, such as such as programs sold on the exchange market. These limited-term policies are not subject to many federal insurance rules, including those from the Affordable Care Act that guarantee basic benefits and prohibit insurers from reject customers based on pre-existing conditions.
“This regulation sends a clear message: Garbage insurance is no substitute for the real thing.” Executive director of the Association of Community Linked Health Plans, Margaret Murray said in a press release. “Short-term, limited-term insurance plans and other non-ACA-compliant plans provide a false sense of security that threatens the physical and financial health of consumers. They trick customers with low premiums, only to force them to accept coverage that is sketchy or even nonexistent,” Murray said. The insurance industry group unsuccessfully sued to block the Trump-era rule last year. 2018.
The health insurance trade association AHIP did not respond to a request for comment.
According to the National Association of Insurance Commissioners, dozens of states effectively ban the sale of short-term insurance by outlawing them health insurance, while 13 states and the District of Columbia only allow three-month term.
The proposed rule would also amend the regulation of fixed-indemnity health plans that provide coverage with hard dollar limits and also do not follow federal benefit and coverage standards. Under the draft rule, which will replace the 2014 rule, insurers will have to pay claims on a period-by-period basis rather than on a service-by-service basis. These policies were originally a supplement to comprehensive health insurance and provide an alternative income for policyholders with health problems, but have grown rapidly as carriers have designed them. they are more similar to traditional health insurance.
The Departments of Health and Human Services, Labor and Treasury will accept comments on the proposed rule through September 11.
