June 24, 2024

Serene Nest

taking care of your health, Our Mission

Why it matters that Biden is taking aim at ‘junk’ health care plans

3 min read

Many of this week’s biggest political headlines relate to Donald Trump’s many scandals, the former president’s ugly grifts, and Republican failures to uncover similar controversies related to President Joe Biden.

But all the while, the Democratic administration, slowly but surely, continues to focus on good governance in ways that actually help people. The Associated Press reported:

President Joe Biden on Thursday announced new steps to protect consumers who buy short-term health insurance plans that critics say amount to junk. A new rule finalized by the Democratic president’s administration will limit these plans to just three months. And the plans can only be renewed for a maximum of four months, instead of up to the three years that were allowed under Biden’s predecessor, Republican Donald Trump.

The same AP report added that the Democratic administration is also “requiring short-term plans to provide consumers with clear explanations of the limits of their benefits.”

Neera Tanden, Biden’s domestic policy adviser, told reporters, “The president really believes the American people do not want to be taken for suckers and junk insurance takes them for suckers.”

For those who don’t follow the ins and outs of federal health care policymaking, this might seem a little obscure, but I’ve long taken an interest in this because it matters to a lot of consumers.

Revisiting our earlier coverage, Donald Trump failed spectacularly in his attempts to repeal the Affordable Care Act, but while in office, the former president was able to take a variety of steps — mostly without Congress — designed to undermine the system.

Near the top of the list was the Republican administration’s 2018 decision to expand access to so-called “short-term” health care plans — which some deride as “junk” coverage.

To be sure, the ACA was designed to include such plans, but they were only supposed to serve as stopgap coverage for a few months. The Trump administration changed the rules, opening the door to insurers offering “short-term” plans that would effectively be available for three years.

For some consumers, this might’ve seemed like a good deal. After all, these plans made it possible for people to buy much cheaper insurance. But there were serious flaws in this approach that the Republican White House largely ignored.

First, these plans tended to be pretty awful. We’re talking about skimpy coverage that left many Americans with significant medical bills for one obvious reason: The safeguards and consumer protections at the heart of “Obamacare” didn’t apply to these plans.

Second, those with pre-existing conditions generally couldn’t even purchase these plans.

And third, none of this did any favors to the overall health care system. The more younger and healthier people were encouraged to move toward lower-cost, lower-coverage plans, the greater the cost pressures for everyone else.

Even some private insurers warned the White House not to pursue such a course. The Republican president and his team did it anyway.

Now, Biden and his team are undoing that work, placing new limits on temporary plans, and requiring improved disclosures on the limited benefits available through these plans.

I wouldn’t be surprised if the next Republican administration — whenever it exists — tries to reverse course on these developments, but for now, it’s good news for consumers, whether it shows up on front pages or not.

The Blue Cross Blue Shield Association said in a written statement, in reference to the Biden administration’s policy, “Ensuring access to affordable health care is longstanding priority for Blue Cross and Blue Shield companies. While short-term limited-duration insurance (STLDI) plans can help consumers bridge gaps between medical plans, they should not be considered a long-term replacement for comprehensive coverage. We support limiting the duration of STLDI products and educating consumers on how they differ from comprehensive coverage. We will continue working with our partners to ensure people can get the care they need, when they need it, at a price they can afford.”

This post updates our related earlier coverage. It’s also been updated with a revised quote from the Blue Cross Blue Shield Association.

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