Biden Admin Proposes New Rules to Combat ‘Junk Insurance’: Limitations and Greater Transparency for Consumers

In an effort to safeguard consumers from junk insurance, the Biden administration has proposed new rules that limit short-term health insurance coverage to four months and require insurers to clearly outline their plans’ inclusions and exclusions. Currently, approximately 1.9 million Americans rely on short-term health insurance as a temporary solution while transitioning between different health plans. However, critics argue that these plans do not offer comprehensive coverage and disregard essential ACA protections like covering preexisting conditions.

White House domestic policy adviser Neera Tanden has been vocal in her criticism of short-term plans, calling them “junk insurance.” The new rules aim to provide greater transparency and protection for consumers by limiting the duration of short-term plans and mandating insurers to clearly communicate the scope of coverage. Despite the impending changes, individuals currently enrolled in short-term plans will still be able to renew their coverage according to their existing plan terms within the next 60 days.

The proposed changes are expected to take effect in 60 days, providing clarity and enhanced consumer protections for those utilizing short-term health insurance. By limiting short-term plan durations and requiring more transparent communication from insurers, the Biden administration hopes to ensure that consumers receive accurate information about their coverage options and can make informed decisions about their health care needs.