Biden Administration Cracks Down on Short-Term Health Insurance Plans 

By Consumers for Quality Care, on April 24, 2024

The Biden administration officially finalized a rule that significantly limits the use of short-term health-insurance plans and provides consumer protections for existing plans, according to Healthcare Dive. 

Under previous regulations finalized under the Trump administration, short-term insurance plans could be offered for up to 12 months, with the option to renew for up to 36 months. Additionally, these short-term plans were not required to meet consumer-protection standards included in the Affordable Care Act (ACA). As a result, many consumers bought these short-term insurance plans without knowing that they were buying what advocates often refer to as “junk” insurance. 

These plans are also known for leaving consumers with big surprise bills and confusing patients about what types of coverage and services are available. For these reasons, these plans are either banned or heavily regulated in nearly half of all U.S. states.  

Starting in September, the new rule will decrease the duration of these plans from 12 months to three months, with a maximum extension of one month instead of 36 months. In addition, the new rule will require that all short-term plans disclose their coverage limitations as well as the benefits to which consumers are entitled. Finally, the new rule will ban the practice of “stacking,” or offering consumers a new short-term policy right after their previous one expires. Under this ban, insurance companies cannot issue a renewal or extension to a consumer within the same year. 

The new rule also adds more transparency to ensure consumers are aware of the services that are covered. The policies of the health plans must be on the first page of the contract, as well as included in marketing and enrollment campaigns.  

CQC applauds the new actions that the Biden administration is taking to ensure all consumers have access to affordable and quality care.