A final rule released Thursday would roll back a Trump-era policy that drastically expanded what Biden officials and Democratic critics call “junk” plans.
The new policy limits the duration of the insurance plans to three months, with the option of a one-month extension and no renewal after the extension. Plans will also be required to provide consumers with a clear explanation of the limits of the coverage they provide.
Democrats have been urging the Biden administration to roll back the Trump administration’s policy for years.
Short-term plans were originally meant to be temporary safety nets to help people avoid gaps in health coverage, such as if they were transitioning between jobs. The Obama administration passed regulations aimed at limiting their use, imposing a limit of less than three months.
But in an effort to weaken the Affordable Care Act, the Trump White House made short-term plans more accessible. People could stay on the plans for a year, and they could be renewed for up to three years, rather than three months. After that, they could apply again and renew for another three years.
People being sold short-term plans have often been told they are cheaper than ObamaCare-compliant coverage, but not about the limits of coverage. So people with preexisting medical conditions could be charged more or even denied coverage.
