To help consumers, Biden takes aim at ‘junk’ health care plans

As 2023 got underway, President Joe Biden focused quite a bit of administrative attention on so-called “junk fees,” and the White House had some success on this front. In the hopes of giving American consumers a break, the Democratic president and his team, on the heels of Biden’s State of the Union address, eyed new rules to block annoying fees industries add to everything from airline tickets to financial services.

Now, however, Biden is shifting his focus from junk fees to junk plans. USA Today reported:

President Joe Biden is cracking down on what the White House calls “junk” health insurance plans — namely, less-robust and short-term coverage that the Trump administration expanded as a cheaper alternative to Obamacare plans.

For those who don’t follow the ins and outs of federal health care policymaking, this might seem a little obscure, but it matters.

Revisiting our coverage from several years ago, Donald Trump failed spectacularly in his attempts to repeal the Affordable Care Act, but while in office, the former president was able to take a variety of steps — mostly without Congress — designed to undermine the system.

Near the top of the list was the Republican administration’s 2018 decision to expand access to so-called “short-term” health care plans. To be sure, the ACA was designed to include such plans, but they were only supposed to serve as stopgap coverage for a few months.

The Trump administration changed the rules, opening the door to insurers offering “short-term” plans that would effectively be available for three years.

For some consumers, this might’ve seemed like a good deal. After all, these plans made it possible for people to buy much cheaper insurance. But there were serious flaws in this approach that the Republican White House largely ignored.

First, these plans tended to be pretty awful. We’re talking about skimpy coverage that left many Americans with significant medical bills for one obvious reason: The safeguards and consumer protections at the heart of “Obamacare” didn’t apply to these plans.

Second, those with pre-existing conditions generally couldn’t even purchase these plans.

And third, none of this did any favors to the overall health care system. The more younger and healthier people were encouraged to move toward lower-cost, lower-coverage plans, the greater the cost pressures for everyone else.

The Blue Cross/Blue Shield Association said the Trump administration’s gambit had “the potential to harm patients.” The Republican president and his team did it anyway.

Now, Biden and his team are undoing that work, limiting temporary plans to four months and requiring improved disclosures on the limited benefits available through these plans.

I wouldn’t be surprised if the next Republican administration — whenever it exists — tries to reverse course on these developments, but for now, it’s good news for consumers.

 This post updates our related earlier coverage.

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