New Biden Rule Aims to Curb Short-Term Insurance Scam, Protect Consumers’ Health

Biden promotes new regulation to target substandard health insurance

President Biden recently held a meeting with his Competition Council to discuss ways to make healthcare more affordable. During the meeting, he announced a new rule aimed at cracking down on short-term insurance plans, which offer inexpensive coverage but often provide minimal services and leave customers with high medical bills.

The Biden administration considers these plans a scam that lured individuals into paying monthly premiums but failed to offer adequate coverage when needed. The new rule will limit short-term insurance plans to a maximum of seven months, down from the previous allowance of up to three years. Plans will be required to clearly outline the coverage provided and any limitations.

The White House introduced this rule in response to a 2018 rule change under the Trump administration, which made short-term insurance plans more prevalent. Unlike plans under the Affordable Care Act, these short-term plans do not have to adhere to the same consumer protection standards. The White House is concerned that allowing insurance companies to offer these plans without adequate regulations could lead to loopholes that circumvent important protections, such as coverage for pre-existing conditions.

Supporters of the Affordable Care Act are concerned that short-term plans may draw in younger, healthier individuals away from ACA plans. This could impact the funding and sustainability of the ACA on a national level. President Biden’s administration is taking steps to address these concerns and ensure that individuals have access to quality healthcare coverage without falling victim to subpar insurance plans.

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