WASHINGTON President Joe Biden is cracking down on what the White House calls junk health insurance plans, which is less robust, short-term coverage that the Trump administration has expanded as a cheaper alternative to Obamacare plans.
Insurance rules set out in the Affordable Care Act, for example, require plans to cover pre-existing conditions. That’s not the case with short-term plans, which can deny you full coverage when people change jobs and still need temporary health coverage.
The Trump administration had argued that the short-term plans were a more affordable option that could appeal to temporary contractors and gig economy workers who don’t get health insurance through a job.
Biden announced on Friday a draft regulation that, when finalized, would limit temporary plans to four months instead of the current maximum of three years. It would also require more information on coverage limits.
Before his East Room remarks, Biden was introduced by Cory Dowd, who said he had been billed more than $37,000 for an emergency appendectomy because his short-term plan covered only a fraction of the cost.
It’s not necessarily about health care,” Biden said. It’s about being teased for an idiot.
GOP Representative Virginia Foxx, chair of the House Education and Workforce Committee, said Biden is picking up a consumer choice hatchet as he backs the expensive and inflexible plans offered by the Affordable Care Act .
Biden also detailed steps to make it harder for health care providers to circumvent a recent law that protects consumers from surprise medical bills and announced that the administration is looking into the growing use of medical credit cards.
In addition, Biden publicized a new federal estimate showing 1 in 3 Medicare beneficiaries will save an average of $400 a year on prescription drugs when an out-of-pocket cap begins in 2025.
The White House says the actions build on the president’s promise to lower health care costs for millions of Americans and his fight to eliminate various types of junk taxes, including those for banking, travel and entertainment from I live.
White House domestic policy adviser Neera Tanden cited the example of a Montana man stuck with a $43,000 health care bill because his insurance company said his cancer was a pre-existing condition, according to an article in the 2019 by the Los Angeles Times.
“It’s not real insurance,” he said. “This is junk insurance.”
Here’s what to expect:
Limit “junk” insurance.
The Obama administration had limited the sale of short-term plans to 90-day periods, intending to use them when people switch from one source of coverage to another, such as when they’re between jobs .
In addition to not covering preexisting conditions, short-term plans don’t have to cover other benefits required by the ACA and can limit the amount of care you pay.
But as the Trump administration looked for ways to repeal and replace the ACA, the maximum duration has been extended to three years.
The Biden administration says the plans too often leave families caught up in thousands of dollars in bills when their health care isn’t covered.
The Congressional Budget Office estimated in 2019 that unsuccessful legislation to block Trump’s expansion would result in 1.5 million fewer people purchasing short-term plans each year. Of these, more than 500,000 would purchase comprehensive Obamacare plans, a small number would be covered by an employer, and approximately 500,000 would go uninsured.
Under Biden’s proposed change, anyone now enrolled in a short-term plan could keep it for their original coverage limit, but would be subject to the new rules when their plan expired.
Restoring a tight cap on short-term plans is one of the latest pieces on Biden’s agenda to reinvigorate the ACA, according to Larry Levitt, executive vice president for health policy at KFF, a nonpartisan health research organization.
And he tweetedit took a long time.
Close the “loopholes” to stop surprise medical bills
The bipartisan No Surprises Act that went into effect last year was meant to protect patients from unexpectedly high bills when a doctor or other provider wasn’t part of their insurer network.
But Tanden says some plans and providers were trying to circumvent the rules by changing the terms they use in their contracts to argue, for example, that a hospital isn’t technically networked.
Frankly, what they’re doing is cheating the system, he said. This is not allowed and, as our guide will describe, must stop.
Healthcare services will need to be covered by No Surprises Act protections or, if they are considered in-network, be subject to the Affordable Care Acts annual cap on how much a consumer has to pay out-of-pocket.
Investigate medical credit cards
Administration officials said they have many questions about the growing use of third-party medical credit cards and loans used to pay for treatment. The cards often include teaser rates and deferred interest features that can make them more expensive, according to the White House. Also, consumers may not fully understand the terms.
A joint review by the Bureau of Consumer Financial Protection, the Department of the Treasury and the Department of Health and Human Services will examine how products are sold and how debt is collected.
Financial firms are partnering with healthcare professionals to promote products that can drive patients deep into debt, said Rohit Chopra, director of the Consumer Financial Protection Bureau.
Reduce the cost of Medicare drugs
While promoting new actions, Biden is also promoting savings for seniors through health care, climate change, and taxes in recent years. Under the Inflation Reduction Act, out-of-pocket costs for the Medicares prescription drug plan are capped at $2,000 annually starting in 2025.
Nearly 19 million seniors and other Medicare beneficiaries will save an average of $400 a year, according to the Department of Health and Human Services. The nearly 2 million enrollees with the highest drug costs will save an average of $2,500 a year.
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