The Biden administration is cracking down on short-term 'junk' health plans that can leave members with poor coverage and large medical expenses.
"People hate being played for suckers and the current practice of offering low-quality insurance that people pay into, but then provides no coverage when people need it, is a bait and switch," the White House said March 28.
Under the new rule first proposed in July, short-term health plans are now limited to three months duration, with renewal for a maximum of 4 months total if extended.
The plans will also now be required to provide consumers with a disclaimer that explains coverage limits and the extent of coverage, which is typically less than a traditional ACA plan.
Federal lawmakers have been calling on the president to address short-term health plans, which he called "junk" during the 2020 presidential campaign.
Short-term plans don't have to cover preexisting conditions and are allowed to bypass the ACA's requirement to cover services such as maternity care and mental health treatment. The Obama administration imposed a three-month limit on the short-term plans, but the Trump administration changed the rules to allow people to stay on the plans for a year and renew coverage for up to three years.