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The Biden administration is cracking down on short-term health insurance plans, which it deems “junk insurance” due to their limited coverage that can result in patients facing significant medical bills. The new rule limits the duration of these plans to three months with an option for renewal for a total of four months, and requires clear explanations of benefits and information on finding more comprehensive coverage. This move is in contrast to the approach taken by former President Donald Trump, who extended the duration of short-term plans to weaken the Affordable Care Act.

According to White House domestic policy adviser Neera Tanden, short-term plans can mislead consumers into thinking they have adequate health insurance until they discover limitations on coverage, particularly for preexisting conditions. The rule aims to prevent consumers from being left with hefty bills when they need medical care the most. The administration views Trump’s policy change as harmful to consumers and aims to reverse its effects by limiting the duration of short-term plans.

Short-term plans are not subject to the consumer protections of the Affordable Care Act, allowing them to provide less comprehensive coverage and discriminate against individuals with preexisting conditions. The Trump administration promoted short-term plans as a cheaper alternative to ACA policies due to lower premiums, but critics fear that these plans may attract healthier, younger individuals away from marketplace plans, potentially leading to premium increases for older, sicker Americans.

In addition to the short-term health insurance rule, the Department of Health and Human Services has also introduced a final rule to simplify the process of applying for and renewing coverage in Medicaid and CHIP. The rule extends some consumer protections of the ACA to Medicaid and CHIP enrollees, including eliminating annual and lifetime limits on children’s coverage in CHIP. It also improves coverage transfer for children from Medicaid and CHIP as family incomes rise, and prevents states from conducting more frequent renewals or requiring in-person interviews for older adults and individuals with disabilities.

The Biden administration’s efforts to lower health care costs and eliminate surprise fees are part of its agenda to assist middle- and working-class Americans. President Biden has emphasized the differences in his approach to health care costs, particularly in addressing high drug prices. The enhanced federal premium subsidies in the ACA exchanges have attracted more than 21 million consumers to sign up for coverage in 2024, and more than 45 million people have gained coverage through the ACA. The administration is also focused on reducing drug prices through initiatives such as the Inflation Reduction Act, which includes allowing Medicare to negotiate drug prices and capping costs for certain medications.

Overall, the Biden administration’s recent actions regarding health care costs reflect its commitment to providing affordable and comprehensive coverage for Americans. By curbing short-term health insurance plans and implementing new rules to improve access to Medicaid and CHIP, the administration aims to protect consumers while also addressing challenges such as high drug prices. These efforts are part of a larger agenda to make health care more affordable and accessible for all Americans.

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