Slowly but surely, President Biden is repairing the U.S. health-care system, reversing Trump-era sabotage and ensuring millions more Americans get access to affordable coverage.
The latest of these efforts came on Friday, in a little-noticed but significant decision to protect Americans from junk health insurance.
In 2017, Congress repeatedly tried and failed to repeal the Affordable Care Act. To casual observers, it might have looked like the end of the Republican fight to kill this lifesaving, inequality-fighting, newly popular law. It wasn’t. Over the next few years, President Donald Trump found new ways to sabotage the health-care system and its protections for the most vulnerable Americans.
Among the most insidious of these backdoor repeal measures: expanding “short-term, limited duration” health plans — i.e., attempting to trick Americans into plans that looked cheap but basically covered nothing.
Short-term plans are theoretically intended as brief, stopgap coverage — say, to tide over a new college grad whose job doesn’t start until the fall.
They’re relatively unregulated; they don’t have to cover minimum care benefits guaranteed by Obamacare and other major legislation, for example. A 2018 analysis found that most don’t cover maternity services, substance-abuse care or prescription drugs.
These plans can also deny coverage for care of preexisting conditions, even if the preexisting condition in question hadn’t yet been diagnosed at the time the person enrolled.
People often don’t realize they’ve bought a worthless product until it’s too late — when they get hit by a bus, say, or are diagnosed with a brain tumor.
Such loopholes might seem like no big deal until you find yourself falling through one. The Trump administration made sure more people did by allowing these allegedly short-term plans to last as long as 364 days, rather than the three-month max that had been in place, and to be renewed for up to three years.
This made them look a whole lot like regular plans. Plus, because short-term plans are mega-profitable for insurers, brokers can get much larger commissions for steering hapless customers into them. So, many did.
Exactly how many were lured by this policy change is unclear; the data is lousy, precisely because these products are so unregulated. A recent estimate from the Urban Institute ballparked the number of people enrolled in individual plans that are noncompliant with Obamacare protections at 2.5 million.
The proliferation of short-term junk plans affects even consumers who don’t get duped by them. That’s because these cheaper plans disproportionately siphon healthier (i.e., lower-cost) people out of the broader individual insurance marketplaces. People who have chronic conditions or otherwise know they will need more substantial coverage are more likely to stay in the regular marketplace pool, driving premiums there ever higher.
Last week, however, the Biden administration announced a rollback of this Trump-era expansion of short-term health plans.
In a proposed rule, Biden officials said those already in these skimpy Trump-blessed plans can continue in them, if they so choose. (“There were some hard lessons learned from the ‘if you like your plan you can keep it’ blowback a decade ago,” surmises Georgetown University health scholar Sabrina Corlette.) But going forward, any new “short-term, limited duration” plans would need to be truly short-term (up to three months) and truly limited-duration (renewed for up to one additional month only).
Critically, short-term plans must also provide clearer language about what care they do and don’t cover, and under what circumstances. People who choose to buy junk must know upfront that they’re buying junk.
The White House has marketed this rule as part of “Bidenomics,” though it might be more easily understood as simply pro-consumer. It also dovetails nicely with other actions the administration has taken to expand access to coverage, including outreach to encourage eligible Americans to enroll in marketplace plans and patching the so-called family glitch (a regulatory accident that had blocked a lot of families from accessing subsidized health coverage).
Most important, through last summer’s Inflation Reduction Act, Biden extended the enhanced premium tax credits available for plans on the individual marketplace.
This has meant that millions more Americans can get solid health-care coverage that not only is affordable but also, in many cases, has an out-of-pocket premium of zero dollars. And unlike with those junk insurance plans, the low price tag here isn’t a red flag; these plans actually do provide comprehensive coverage, including for people with preexisting conditions.
It’s not a bait-and-switch. It’s a real subsidy — and one that will likely drive down premiums overall, on average, by drawing more healthy people into the broader marketplace risk pool.
Our health-care system is still kludgy. It still allows too many Americans to fall through the cracks. But small unsung fixes such as this are achievements worth celebrating.
Upvote for answering and refuting, that’s the best way to learn and understand the reality of shit. It’s late and I will be back in the am with a reply
Here’s the reply edit:
As a baseline for all of my answers, I’ve been in the health insurance business for over 5 years in which time I’ve assisted over 3,500 individuals with their health insurance needs. I consider myself an expert in the topic and every response is based on personal experience.
I field at least one call a week from someone that has gone to use their policy with an ACA carrier to find out that the policy has been terminated. The most common reasons are legitimate; failure to make premium payment or failure to submit required documentation. However, in most (not all) instances the carrier fails to notify the individual that there is an issue so they have no idea their coverage has been terminated.
There have also been an overwhelming number of occasions that the coverage has been terminated and there is no explicable reason why it has happened. You are correct that the ACA cannot legally “drop” coverage, but it happens all the time. I have never once seen a Short Term policy terminated for any illegitimate or unknown reason, and if terminated, the client and the agent are always notified of the termination. This is just simply not the case when it comes to ACA, it always seems to be a surprise.
It’s great that you’ve had a good experience, and a lot of people do. I’m not suggesting the ACA is terrible, just that there are a number of issues that get completely glossed over when shitting on the other options out there. Forcing people into one specific type of plan without recognizing the faults to those plans is disingenuous at best.
In regards to the medication you are referring to, of course it worked as advertised, it’s pretty inexpensive in the grand scheme of things. If you look back at my comment regarding prescriptions, I’m referring to specialty drugs that have retail prices in the thousands of dollar range. The type of drugs that are required for individuals to survive.
Bad coverage is a subjective term. As previously stated, my experience is that the people with what you would consider “junk insurance” prefer them pretty heavily to the options available through the ACA. The whole point is choice, and removing the option for individuals to go outside of the ACA is eliminating that choice.
To expand on my prior comment about sick and low income individuals, I guess you just have to take my word that the majority of the individuals that I work with only go to the ACA if they are not healthy enough to qualify for underwritten health insurance policies, or if they get a huge subsidy making the premium lower than it would be otherwise.
Again, the step therapy refers to very expensive medications, and yes the ACA insurance carriers make you go through that process each and every year. They flat out do not want to pay for the drugs and this is their way of attempting to get you to use something less expensive.
The whole point of my comment is to state that going through the ACA does not provide the ability to customize coverage to reduce cost. Again, eliminating choice.
Well, it’s happened each of the past 2 years, so I guess it is pretty likely. In my career in the business I’ve literally never seen a private insurer go insolvent, but I’ve seen at least a half a dozen ACA carriers disappear. Some of them have been smaller, regional carriers, but Bright Health and Friday Health were nationwide carriers that went insolvent.
That’s great and I’m glad you were able to get assistance. That’s not the case for most people.
Obviously I didn’t just pull these issues out of thin air. You are basing your answers on your own personal experience for 1 person (or maybe 1 family). I’ve got experience with 3,500 individuals and every issue or concern they’ve ever had, and for me it remains 9/9. The quite literal only downside to Short Term Insurance is the denial of coverage for pre-existing conditions. That’s it. One issue. And people with pre-existing conditions should not be on those types of plans.
Not sure what you mean by this. The ACA has been around since 2010 meaning this year’s open enrollment will be the 14th on record. The plans are not new by any stretch of the imagination. They’ve also gotten considerably worse over time with higher deductibles, higher copays, higher max out of pockets, more limited networks, etc.
I’m not saying that Short Term Insurance, what you consider “junk plans” is the best option for everyone out there. It’s just not anywhere near as bad as the Biden administration is making it out to be. Give people the option, let them decide what they think is the best fit for their situation and budget.