The Biden administration has unveiled plans to tackle “junk” insurance plans and surprise medical fees as part of its “Bidenomics” agenda, with the aim of reducing healthcare costs for Americans. The White House’s proposed rules target short-term health plans, often referred to as “junk plans” by critics. Unlike plans under the Affordable Care Act (ACA), these temporary plans do not have to adhere to ACA protections, often excluding individuals with pre-existing conditions and offering limited benefits.
Previous administrations have taken conflicting approaches to short-term plans. While the Obama administration implemented regulations to limit their use and promote enrollment in ObamaCare plans, the Trump administration sought to increase access to short-term plans as part of its promise to repeal the ACA. The current White House seeks to counter the actions of its predecessor by limiting the initial duration of junk plans to three months, aligning with the Obama administration’s regulations.
Neera Tanden, Assistant to the President and Domestic Policy Advisor, explained that short-term plans were meant to provide temporary coverage during transitional periods, such as when individuals are between jobs. However, previous loopholes allowed companies to sell what she referred to as “junk insurance” for longer periods, up to three years. The proposed rules would address this issue and require short-term insurance providers to clearly disclose their limited coverage and benefits.
The Biden administration is also targeting surprise medical billing, where patients unknowingly receive treatment from out-of-network providers despite going to an in-network hospital. The administration deems such practices as gaming the system and will establish rules to prevent them. The No Surprises Act, passed by Congress in 2020, already addresses these practices, and the Biden administration’s proposed rules emphasize that surprise billing violates federal law.
Furthermore, the administration will investigate predatory credit cards and loans that patients use to pay off medical bills. These options often lead to higher costs for patients, even when cheaper or free alternatives are available. Providers may incentivize the use of these loans to expedite payment.
The Consumer Financial Protection Bureau, the Department of Health and Human Services (HHS), and the Treasury will collaborate in examining whether organizations advocating for short-term plans are in violation of the law. The proposed rules are open for public comment before their expected implementation later this year.
By addressing “junk” insurance plans and surprise medical billing, the Biden administration aims to make healthcare more affordable and protect consumers from deceptive practices.
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