Biden Moves to Limit ‘Junk Insurance’
Health Care

Biden Moves to Limit ‘Junk Insurance’

President Joe Biden on Friday proposed a set of initiatives intended to reduce health care costs, including new restrictions on short-term insurance plans that critics sometimes refer to as “junk insurance” because they can leave patients with hefty unpaid medical bills.

Access to short-term insurance plans, which typically cost less than the plans available through the Affordable Care Act but also fail to provide comprehensive coverage – many do not, for example, cover pre-existing conditions – was expanded by the Trump administration, which portrayed them as a cheaper alternative to Obamacare. Democratic policymakers argue that the plans are risky for consumers and siphon off healthier customers who are needed to make the federal health care exchanges work properly.

Under the new regulations, short-term plans would be limited to three months, with a potential extension of one additional month. Under Trump, short-term plans were available for up to three years.

“New proposed rules would close loopholes that the previous administration took advantage of that allow companies to offer misleading insurance products that can discriminate based on pre-existing conditions and trick consumers into buying products that provide little or no coverage when they need it most,” the White House said in a statement. “If finalized, the rule would limit so-called ‘short-term’ plans to truly short time periods, close loopholes made worse by the previous administration, and establish a clear disclosure for consumers of the limits of these plans.”

Speaking at a White House event, Biden said the new policies were part of his “Bidenomics” initiative designed to help ordinary citizens. "It's not necessarily about healthcare, it’s about being played for a sucker," he said. "That's a scam and it has to end."

Other initiatives announced today include new restrictions on surprise medical billing and tighter regulation of credit cards that are issued to pay for medical debt. The White House also noted that a new analysis by the Department of Health and Human Services shows that 18.7 million people enrolled in Medicare Part D will save an estimated $400 a year in drug costs once certain provisions of the Inflation Reduction Act take effect in 2025, for an overall savings totaling $7.4 billion.