President Biden’s Proposed Rule on Short-Term Plans Shortchanges the States
President Biden has proposed a new rule purportedly aimed at lowering health care costs. This rule would limit short-term insurance plans to three months with the possibility of a one-month extension. During the Trump Administration, short term plans were enhanced when the rule was changed to allow plans for up to one year with the option to renew twice for a total of three years.
Short-term insurance plans are exempt from many of the requirements set forth in the Affordable Care Act. These plans are designed for people between jobs or who are temporarily without health insurance coverage. These plans are rarely comprehensive and are sometimes referred to by detractors as “junk” plans.
Options are important when it comes to insurance coverage. One person’s “junk” plan might be a perfect fit for someone else. While it is true these plans are not designed to be long-term comprehensive coverage, they are good options for people with short-term needs. In most other areas of our economy, Americans have a wide array of options to pick from depending on their specific needs. The goal should be for health insurance to work in a similar manner where everyone can purchase a plan that fits their specific situation.
If approved, the proposed rule change will result in another important shift. As excepted benefit plans, short-term plans are exempt from some federal law and governed mostly by the states. States currently set their own rules regarding those plans—from how long they can provide coverage to whether or not plans can be renewed or purchased consecutively. The federal government only sets a maximum time limit.
For example, Minnesota allows short term plans with an initial duration of six months and allows no more than twelve months of short-term coverage in an 18-month period. Ohio allows short-term plans with an initial duration of one year, and the purchase of up to three consecutive policies. Twelve states do not allow short-term plans at all. Biden’s proposed rule change will take that authority away from the states, which will be forced to adhere to the same federal restrictions. Instead, we should focus on giving states more control over health care options, not less.
People have the right to choose their own care and what coverage option best fits their needs. We should be utilizing policies that clarify those freedoms like ALEC’s Freedom of Choice in Health Care Act and the Health Care Sharing Ministries Freedom to Share Act. Instead, the Biden Administration is trying to force everyone onto a one-size-fits-all plan.
The United States healthcare system is already overly complicated and over-regulated. Opening up more options and giving citizens more freedom is a step in the right direction. This proposed rule does the exact opposite.