US president Joe Biden is moving against short-term health insurance, referred to as junk insurance, with the aim of boosting the effectiveness of Obamacare.
Under new rules, short-term insurance would be for no longer than four months, instead of the period of up to three years allowed by the previous Trump administration.
Biden said: “Under our rule, short-term plans would have to be short-term. That means four months or less, not three years.”
“Insurance companies would also be required to provide a clear disclaimer upfront about what’s covered and what is not covered, instead of burying it in fine print.
“Second, we’re cracking down on surprise medical bills, which I thought we had made some progress on. You’ve already heard stories about people who choose a hospital that’s in their insurance network and they get a surprise bill for thousands of dollars because the hospital assigned them an aenesthesiologist who wasn’t in their network without them knowing that,” Biden said.
New rules would close loopholes
According to a release from the White House, “New proposed rules would close loopholes that the previous administration took advantage of that allow companies to offer misleading insurance products that can discriminate based on pre-existing conditions and trick consumers into buying products that provide little or no coverage when they need it most”.
US president Donald Trump expanded short-term plans in 2018, allowing them to have a duration of almost a year, and the possibility of being renewed for up to 36 months. The policy was seen as an attempt to reduce the impact of the Affordable Care Act, known as Obamacare, which had been put in place by Trump’s predecessor Barack Obama.
In theory, if not in practice, the short-term plans could also have been used as a stop-gap measure for periods when a person was between plans. But the plans were often shown to be lacking when put to the test.
Whatever the rational, the Trump policy is not supported by the Biden administration.
Biden said: “On too many nights, too many Americans lie in bed staring at the ceiling worrying what will happen if their spouse gets seriously ill; what will happen if something else happens to them.
“Do they have enough insurance? How are they going to pay their medical bills? Will they have to sell their home?
Healthcare not a privilege
“To deny Americans access to the Affordable Healthcare Act — on my watch, healthcare is not a privilege in this country. It should be a right,” Biden said.
“Junk insurance plans leave families surprised by thousands of dollars in bills, often because the insurance plan claims they have a pre-existing condition that isn’t covered,” the White House said.
The future of health policy in the United States is bound to be a big part of the 2024 presidential election campaign, especially if Donald Trump should run for a second term against Joe Biden.
If finalised, the rule would limit short-term plans to short time periods, close loopholes and give more information to consumers.
“New proposed rules would close loopholes that the previous administration took advantage of that allow companies to offer misleading insurance products that can discriminate based on pre-existing conditions and trick consumers into buying products that provide little or no coverage when they need it most,” the White house said.
The US administration said it would also be releasing important guidance on rules against surprise medical billing.
“New guidance will help stop providers from gaming the system by evading the surprise billing rules with creative contractual loopholes that still leave consumers with unexpected costs,” the White House said.
“For the first time in history, the Consumer Financial Protection Bureau, HHS, and Treasury are collaborating to explore whether health care provider and third-party efforts to encourage consumers to sign up for medical credit cards and loans are operating outside of existing consumer protections and breaking the law.
“Medical credit cards and loans often lead to higher costs without consumers fully understanding the risks,” the White House said.