Biden Administration Eliminates Short-Term Medical Plans

The Biden Administration just finished a new rule that will greatly affect short term health insurance plans. This choice goes against something the Trump Administration did before to give people better, more stable health insurance. We’ll discuss what short-term medical plans are, why this change was made, and how it impacts us.

Understanding Short Term Health Care Insurance Plans

A short-term medical plan is a type of health insurance that covers you temporarily. Plans like these usually only last for a short time. They used to last up to a year, but now they only last for 90 days, with an option to extend for an extra month. Short-term plans are less expensive and cover less than the normal plans proposed by the Affordable Care Act (ACA) exchanges. Not having to follow the ACA’s rules means that they might not cover important health benefits like prescriptions, maternity care, or mental health services.

People who only need coverage for a short time, like people between jobs or new college graduates who still need coverage through their employers, often use these plans. However, users may have to pay a lot for medical care if they get sick because their insurance doesn’t cover everything.

Background on Short-Term Medical Plans

Comparison with Regular Health Insurance Plans under the ACA:
Under the Affordable Care Act (ACA), regular healthcare insurance coverage must meet certain requirements, such as offering necessary health benefits to all applicants, even if they already have a health problem. Plans that are in line with the Affordable Care Act (ACA) cover many things, like preventive care, emergency services, and hospitalization. On the other hand, short-term medical plans don’t have to follow these rules, and they usually only cover a few things. This makes them a less safe choice for long-term healthcare needs.

Historical Context: Changes under the Obama, Trump, and Biden Administrations
The regulatory landscape for short-term medical plans has shifted significantly over the past few years, reflecting different policy priorities across presidential administrations:

• Obama Administration: When Barack Obama was president, it was harder to get short term health insurance plans. The government made rules that these plans could last up to three months. This rule aimed to get people to sign up for ACA-compliant plans, which offer better benefits and protect against not having enough insurance.
• Trump Administration: On the other hand, They wanted to make more short-term plans available. In 2018, it ruled that these plans could last under a year and be renewed for up to three years. This change was part of a larger plan to give people more insurance options and make them more reasonable, even if some of those options had less coverage.
• Biden Administration: The current administration reversed the Trump administration’s move to make short-term plans bigger. The Biden Administration approved a new rule that short-term health plans can only last for 90 days, with an option to extend for an extra month. This choice aligns with the administration’s larger goals of strengthening the ACA markets and ensuring everyone can get reliable and complete health insurance. The rule’s goals are to keep people from losing money because they don’t have enough insurance and to keep healthy people from leaving their ACA plans, which would make the insurance market less stable.

Pros and Cons of Short-Term Plans

Pros:

• Lower Premiums: Monthly rates for short-term plans are usually less than those for ACA-compliant plans, which makes them a good choice for some people.
• Flexibility: These plans can be a short-term option for people who need coverage immediately, like those between jobs or waiting for their employer-based insurance to start.

Cons:

• Limited Coverage: Short-term plans usually do not cover pre-existing conditions, prescription drugs, maternity care, or mental health services.
• Financial Risks: If consumers don’t have coverage for important benefits, they may have to pay a lot of money out of their pockets.
• Misleading Marketing: There have been instances of deceptive advertising where consumers were led to believe these plans offered more coverage than they did.

Impact on Consumers and the Healthcare Market

The new rule affects consumers and the healthcare market in several ways. People who have short-term plans or are thinking about getting them will need to look for more complete choices as soon as possible because of the rule. This could cause more people to buy plans that are in line with the Affordable Care Act (ACA). These plans usually have higher rates and cover more things.

People are also worried about how this change will impact the insurance market. Limiting the number of short-term plans could hurt competition, which could cause health insurance marketplace plans to cost more. Supporters, on the other hand, think that limited short-term plans will make the market healthy and more stable, leaving fewer consumers without enough insurance to protect them.

Arguments For and Against the Regulation

Supporters’ Perspective: Supporters of the new rule and the Biden administration say that it will strengthen the ACA markets by ensuring more people have full coverage. They think that short-term plans sometimes give people more safety and can trick people into thinking they have full coverage when they don’t. The government wants to protect people from unexpected medical costs and make sure they can get the care they need by limiting these plans.

Opponents’ Perspective: Some people who are against it say that short-term plans are important and reasonable for people who can’t afford ACA-compliant plans. They say that these plans are especially good for contract and self-employed workers who might be unable to get assistance on the ACA markets. Some people are against the new rule because they think it will limit buyers’ choices and make temporary insurance more expensive for those who need it.

Real-World Examples and Case Studies

Real-life examples show how dangerous short-term goals can be. For example, a man in Montana had over $40,000 in medical bills because his health insurance short term plan did not cover his cancer care because it was already known about him. In the same way, a woman in Pennsylvania got $20,000 in bills for a surgery that her insurance did not pay. These cases show how dangerous it can be to count on insurance that isn’t enough and how important it is to have full coverage.

A study from Georgetown University found that false ads for short-term deals are common. Researchers found that agents often didn’t tell customers that there were free or cheap plans that were in line with the Affordable Care Act. Instead, they used demanding and dishonest sales techniques to push short-term plans with higher fees.

The Role of Consumers

Because of these changes, people need to be very careful when picking health insurance. It is important to know what short-term plans don’t cover and to look into all available options, including plans that are in line with the Affordable Care Act. To make smart choices about their health insurance, people should carefully read through plan features and look for accurate information.

Conclusion

Eliminating long-term and short term health insurance plans by the Biden Administration is a big step toward strengthening the Affordable Care Act and making sure that all Americans can get full healthcare coverage. This change aims to protect consumers from bad insurance and make the insurance market healthy, even if it means fewer choices for some. As LMS Insurance Group, it’s our job to let you know about these changes and give you the confidence to make your way through the changing healthcare situation.