The announcement, first reported by POLITICO, comes as Biden is delivering a speech Friday promoting his health care agenda, which will include efforts to crack down on junk taxes and other actions aimed at reducing health care costs.
What’s in the rule: If finalized, the short-term health plans will last for three months and can only be renewed for one more month.
The Trump-era rule allowed these types of plans to last up to a year and be renewed for up to three years. A 2016 rule under President Obama limited short-term plans to three months.
Short-term plans don’t have to meet the same requirements as a health insurance plan sold on Obamacare insurance exchanges. These requirements may include coverage for pre-existing conditions and certain essential health benefits such as prescription drugs.
Consumers currently enrolled in short-term plans will be protected under the old rules, according to a senior administration official who declined to discuss details of the Biden plan.
The rule doesn’t limit the sale of short-term plans during Obamacare open enrollment as some Democratic lawmakers had hoped.
When asked Thursday why it took several years to take this step, a senior administration official replied that “we’ve been busy with health care. We achieved a record number of ACA coverage signups.”
What else did they announce? The administration also launched guidance intended to plug a loophole in the No Surprises Act, which Congress passed in 2020 to prevent patients from receiving surprise bills when they are treated by out-of-network providers.
HHS officials are concerned that health insurers are relying on some loopholes like contracting with a hospital but saying it’s technically not in the net, according to a White House fact sheet.
The guidance says the move « is not permitted by federal law. Health care services provided by these providers are either out-of-network and subject to surprise billing protections, or they are in-network, » the factsheet said.
Administration officials are also concerned that consumers are being charged « service fees » for work performed outside of a hospital, such as at an affiliated doctor’s office. A plan and a hospital need to make consumers aware of these fees.
Several agencies also want to learn more about the impact of third party medical credit cards. HHS, the Treasury and the Consumer Financial Protection Bureau want information on the use of such cards that feature extremely high interest rates, senior administration officials said on Thursday’s call with reporters.
The administration released new research Friday outlining the impact of the Inflation Reduction Act cap on Part D out-of-pocket expenses. The report predicts that the change could reduce out-of-pocket expenses by nearly $400 for the nearly 19 million Part D enrollees.
“Among this population, the report finds that nearly 1.9 million enrollees are expected to save at least $1,000 in 2025,” a statement about the report said.