Patients, Insurers Laud Biden Bid to Curb Short-Term Coverage

A mix of medical provider groups, insurers, and patient advocacy organizations voiced strong support for the Biden administration’s move Friday to curb the sale of “junk” health insurance plans, and to shore up other protections for patients.

Short-term limited-duration insurance plans have been assailed by critics because they don’t cover a group of essential health benefits like small-group health plans and individual marketplace coverage. The short-term plans also don’t have to cover people with preexisting conditions, can deny and rescind coverage, charge sicker people higher rates, and aren’t subject to limits on out-of-pocket spending.

A proposed rule, issued by three federal government agencies, calls for limiting the length of the initial STLDI contract period to no more than three months, and the maximum coverage period to no more than four months, taking into account any renewals or extensions. That would reduce the current maximum length of short-term coverage from up to 36 months, according to the Centers for Medicare & Medicaid Services.

In a statement, Stacey Hughes, executive vice president of the American Hospital Association, said the proposal protects “consumers from skinny “health plans” that often fail them.” If finalized, she said the rule “will go a long way in protecting patients from unexpected coverage denials.”

Margaret A. Murray, chief executive officer of the Association for Community Affiliated Plans, was equally supportive. STLDI plans “and other non-ACA-compliant plans offer a false sense of security that threatens consumers’ physical and financial health,” she said in a statement. “They trick customers with low premiums, only to force them to swallow skimpy or even non-existent coverage.

“The result is people pay a lot more money—and in return, often receive far less coverage than they are led to believe they’ve purchased.”

But Brian Blase, president of the Paragon Health Institute, said the proposal “will break the president’s campaign promise not to take away private coverage and will increase the number of people without health insurance.”

“Short-term plans provide quality, affordable coverage for millions of people, reduce the number of the uninsured, help people who get sick, and, contrary to the critics, do nothing to undermine the Obamacare market,” he said in a statement.

That was the argument of Republicans in August 2018 when a Trump administration rule allowed the short-term plans to be sold for up to 364 days with renewals for up to three years. Under the Affordable Care Act enacted during the Obama administration, the plans had expired after just three months and renewals were only for three months.

As Democrats urged the Biden administration to reverse the Trump rule, Republicans maintained that the short-term plans were affordable options for people who can’t afford plans that comply with ACA coverage requirements.

Affordability became less of a concern, however, after the American Rescue Plan Act increased ACA premium tax credits and expanded eligibility for financial assistance to people earning above 400% of the federal poverty level for 2021 and 2022. The Inflation Reduction Act continued those expanded subsidies through 2025.

Lisa Lacasse, president of the American Cancer Society Cancer Action Network, said the proposed rule, if implemented, would strengthen insurance protections for millions of cancer patients, survivors, and those at risk for the disease.

“The deceptive and aggressive marketing” by STLDI plans “makes it nearly impossible for the average person to determine if what they are purchasing will in any way meet their needs,” Lacasse said in a statement. “The proposed rule would require clear disclosures to help better educate consumers.”

No Surprises Act

The Biden administration also issued guidance designed to ensure providers are adhering to the No Surprises Act, which was designed to protect patients from unexpected bills when treated by a doctor or other health-care provider outside their insurer’s network.

The administration said some health plans were using technical loopholes to claim some hospitals they contract with weren’t in-network. “The Administration today is making clear this is not allowed under federal law: health care services provided by these providers are either out-of-network and subject to the surprise billing protections, or they are in-network and subject to the ACA’s annual limitation on cost-sharing, further protecting consumers from excessive out-of-pocket costs,” said a White House fact sheet.

The White House also called on health plans to notify consumers of facility fees that they can be charged for when care is provided outside of hospitals, like at a doctor’s office.

“The administration is addressing ‘facility fees,’ which can also be a surprise bill for patients, by calling for health plans and non-hospital facilities that often charge these fees” to “make information about them publicly available to patients,” said a statement from Omar T. Atiq, president of the American College of Physicians.