New Biden Admin Rule Is Boon To Insurance Companies At The Expense Of Consumers, Experts Say

The Biden administration recently put in place a new rule restricting the availability of short-term health insurance plans, which could raise costs and leave many without coverage, experts told the 🏢Daily Caller News Foundation.

The rule amends the definition of a short-term, limited-duration insurance (STDLI) plan so that the initial contract extends only three months with a possible one-month extension, down from the previous allotment of 12 to 36 months, accordingto the Centers for Medicare and Medicaid Services. Restricting access to the plans, which are common for people switching jobs, is poised to raise prices in some markets due to a loss of consumer choice while also threatening to leave many Americans without coverage who get kicked off their STDLI plan at its termination, according to experts who spoke to the DCNF.

“The first effect will be to strip consumer protections from short-term plans,” Michael Cannon, director of health policy studies at the Cato Institute, told the DCNF. “Requiring insurers to terminate such plans after just four months eliminates consumer protections by protecting consumers from financial risk for shorter periods. The second effect is that this rule change will terminate coverage for people after they get sick and leave them uninsured for up to 12 months. When consumers enroll in a short-term plan and then fall ill, this rule will terminate their coverage within four months. They will then be unable to purchase new short-term plans because their illnesses will have become uninsurable preexisting conditions.”

A large issue with the restrictions on short-term plans is that the Affordable Care Act (ACA), often called “ObamaCare,” has a limited enrollment window, ending in most states in early January and not opening again until November, leaving many unable to enroll during certain parts of the year. Only certain groups can enroll in ACA-complaint health plans year-round, including American Indians, Alaska Natives, those eligible for Medicaid or the Children’s Health Insurance Program and people falling under certain state-specific programs.