Are short-term health insurance plans as ‘skimpy’ as claimed by the Biden administration?

The Biden Administration’s Proposal to Scale Back Short-Term Health Insurance Plans

The Biden administration has recently put forth a proposal to cut back on short-term, limited-duration insurance plans for healthcare, which it criticizes as providing inadequate coverage. These plans were expanded under the Trump administration as a way to bypass the Affordable Care Act, former President Barack Obama’s landmark healthcare legislation. The 2018 federal rule implemented by the Trump administration allowed insurance companies to offer healthcare coverage outside of the ACA framework.

Scaling Back the Plans

The Biden administration is now aiming to scale back these plans. Cabinet agencies have taken steps to drop a rule in the regulatory pipeline to achieve this. On July 7, the departments of Health and Human Services, Labor, and the Treasury jointly issued a notice of proposed rulemaking. If finalized, the new rule would limit the initial contract period to a maximum of three months and the overall coverage period to no more than four months, according to a news release from the departments.

This would be a significant reduction from the current allowances. Currently, short-term, limited-duration insurance contracts can start at under one year and be extended for up to three years with one insurance provider.

Expert Opinions

Healthcare experts have expressed mixed opinions about this proposal. Chris Pope, a senior fellow at the Manhattan Institute, argues that short-term, limited-duration insurance plans offer lower out-of-pocket costs, broader networks, and higher satisfaction rates compared to plans available on the Obamacare exchange. He questions how forcing people off their insurance plans after a few months will benefit them.

On the other hand, Nidhi Hegde, a director at the American Economic Liberties Project, supports the Biden administration’s efforts to combat what she calls “junk insurance” and “junk fees.” She believes that this crackdown prioritizes working families over corporate profits.

Matthew Fiedler, a senior fellow at the Brookings Institution’s Schaeffer Initiative for Health Policy, sees the rule change as a mixed bag. While it may reduce the flexibility of the short-term insurance market, he believes it is a step in the right direction for policy. Fiedler acknowledges that some users may need time to adjust to the shift to Obamacare, but he believes it will ultimately have positive effects.

Potential Consequences

One potential consequence of this rule change is that more people may go without health insurance. Fiedler acknowledges this concern but believes that the generous subsidies available for ACA-compliant plans will minimize the number of individuals becoming fully uninsured.

Overall, the Biden administration’s proposal to scale back short-term, limited-duration insurance plans has sparked a debate among healthcare experts. While some argue that these plans offer better benefits, others believe that the shift to ACA-compliant plans will ultimately benefit both individuals and the healthcare system as a whole.

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