Protecting Consumers from ‘Junk Insurance’: Biden Proposes New Regulations on Short-Term Health Insurance

The Biden administration has recently proposed new rules to protect consumers from short-term health insurance companies that exploit loopholes in the Affordable Care Act. These new regulations will prevent insurers from denying coverage for preexisting conditions and limit short-term health insurance coverage to four months.

Under the proposed changes, insurers will be required to clearly outline what is included and excluded in their plans, providing greater transparency for consumers. Approximately 1.9 million Americans currently have short-term health insurance, which is designed to provide temporary coverage while transitioning between different health insurance plans. However, critics argue that these plans do not offer comprehensive coverage and do not comply with important ACA protections.

White House domestic policy adviser Neera Tanden has been a vocal critic of short-term plans, calling them “junk insurance” that mislead consumers into believing they are receiving full-coverage health insurance when in reality their coverage is limited or certain health conditions are not covered at all. The new rules aim to address these concerns by limiting the duration of short-term plans and requiring insurers to clearly explain the scope of coverage.

Despite the new rules, individuals currently enrolled in short-term plans will still be able to renew their coverage according to the terms of their existing plans. The changes are expected to take effect in 60 days, providing more clarity and consumer protections for those utilizing short-term health insurance.