The rule has garnered support from patient organizations—including the Lung Association, AAFA, Cystic Fibrosis Foundation, and Pulmonary Hyptertension Foundation—which applaud a move toward eliminating inadequate health insurance plans.

RT’s Three Key Takeaways: 

  • The Biden-Harris Administration issued a final rule to address the issue of “junk” health insurance, aiming to protect consumers from policies that offer minimal coverage and leave them with high out-of-pocket costs for medical treatments.
  • Under the new rule, insurance plans will be required to provide consumers with a clear disclaimer that explains the limits of what services they cover and how much they cover.
  • The rule also restricts “short-term” health insurance plans to a genuine short-term duration of three months, with a possible extension to four months—down from the previously allowed three years.

The Biden-Harris Administration issued a final rule targeting “junk” health insurance. The administration says the rule will protect consumers from low-quality coverage that fails to cover significant medical expenses or necessary treatments.

Under the new rule, “short-term” plans must be truly short-term. New plans that claim to be “short-term” health insurance are now limited to three months, with renewal for a maximum of four months total, if extended—instead of up to three years as previously allowed.

Plans also have to clearly disclose limits. Insurance plans will now be required to provide consumers with a clear disclaimer that explains the limits of what services they cover and how much they cover. 

“These actions will reduce scam insurance plans that offer really no insurance at all,” reads a release issued by the White House. 

Patient Organizations Support the Change

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The new rule drew support from 35 patient organizations, which noted that a federal rule change in 2018—strongly opposed by the organizations—allowed for the proliferation of short-term health plans. Since then, the organizations have warned lawmakers about the risks they say these plans bring both to individual patients and the larger health coverage market.

“The new rule will ensure that short-term health plans are used as they were originally intended: as short-term, stop-gap coverage while consumers are between other plans,” reads a release from the American Lung Association on behalf of the patient organizations. 

According to the release, short-term plans, marketed as an alternative to traditional health insurance, are exempt from certain consumer protections. 

“They often do not cover essential care, like prescription drugs or mental health services, and allow insurers to penalize consumers with pre-existing conditions and charge women more for their coverage. Further, these plans can utilize annual and lifetime coverage limits—leaving patients responsible for extraordinary costs. Due to deceptive marketing practices, consumers often do not even know they’ve purchased a short-term plan until they attempt to use their coverage—only to discover its limitations. By then, it’s too late; they already face insurmountable medical bills,” the release continues.  

The 35 patient organizations are: 

  • ALS Association
  • American Cancer Society Cancer Action Network
  • American Diabetes Association
  • American Heart Association
  • American Kidney Fund
  • American Lung Association
  • Arthritis Foundation
  • Asthma and Allergy Foundation of America
  • Cancer Support Community
  • CancerCare
  • Child Neurology Foundation
  • Chronic Disease Coalition
  • Crohn’s & Colitis Foundation
  • Cystic Fibrosis Foundation
  • Epilepsy Foundation
  • Foundation for Sarcoidosis Research
  • Hemophilia Federation of America
  • Immune Deficiency Foundation
  • Lupus Foundation of America
  • March of Dimes
  • Muscular Dystrophy Association
  • National Bleeding Disorders Foundation
  • National Coalition for Cancer Survivorship
  • National Eczema Association
  • National Health Council
  • National Kidney Foundation
  • National Multiple Sclerosis Society
  • National Organization for Rare Disorders
  • National Patient Advocate Foundation
  • National Psoriasis Foundation 
  • NMDP (formerly National Marrow Donor Program)
  • Pulmonary Hypertension Association 
  • Susan G. Komen
  • The AIDS Institute
  • The Leukemia & Lymphoma Society 

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