Biden’s Proposal to Restrict Short-Term Health Plans; How Consumers and Insurers Will Be Affected

President Joe Biden unveiled his proposal to restrict short-term health plans, a move that could result in millions of Americans losing their current insurance coverage. This article sheds light on the potential consequences of Biden’s proposal and explores the implications for consumers and insurance companies alike.

Under President Biden’s proposal, short-term health plans would see a drastic reduction in their maximum term, shrinking from three years to a mere three or four months. (Photo: USA Today)

The Role of Short-Term Health Plans

While Biden justified his decision to restrict short-term health plans by labeling these plans as a “scam” that needed to be eradicated, the reality is that short-term health plans have been a vital and affordable alternative for many individuals who struggle to afford the high-premium, high-deductible options under Obamacare.

According to Washington Examiner, short-term health plans have offered millions of Americans a lifeline by providing affordable alternatives to the expensive coverage offered under Obamacare.

These short-term health plans have seen significant uptake, with around 3 million people enrolling in them since 2018, and an overwhelming 78% of Americans supporting their availability.

Unlike Obamacare plans with monthly premiums reaching approximately $1,000, short-term health plans offer basic coverage at a fraction of the cost.

This substantial reduction in monthly insurance payments, averaging between 50% to 80%, has been especially beneficial for younger individuals facing financial challenges such as student loans, rising rent prices, and credit card debt.

READ ALSO: Biden Administration Targets Short-Term Health Insurance Plans, Citing Patient Financial Strain

Consequences of Biden’s Proposal to Restrict Short-Term Health Plans

According to Forbes, President Biden has proposed rules released Friday of the July 4^th week. Under President Biden’s proposal, short-term health plans would see a drastic reduction in their maximum term, shrinking from three years to a mere three or four months.

This decision could lead to families losing coverage in the middle of the year, with no option to join an Obamacare plan until the next open enrollment period.

The nonpartisan Congressional Budget Office estimates that this move could result in as many as 500,000 people becoming uninsured each year.

While Biden claims his proposal to restrict short-term health plans aims to protect consumers from inferior coverage, critics argue that it is more about appeasing insurance companies and balancing their risk pools.

This move could force millions of American families to face higher premiums, larger deductibles, and narrower provider networks, without any tangible benefits.

Furthermore, the notion that pushing short-term plan holders into Obamacare plans will reduce premiums on the Affordable Care Act exchanges has not materialized in states that already restrict short-term plans.

In fact, states with broader access to short-term insurance have experienced higher overall healthcare coverage enrollment and substantial reductions in insurance premiums. The increased competition fostered by short-term health plan coverage availability has strengthened offerings from insurance companies participating in the ACA marketplace.

READ ALSO: Billions Of National Institutes Of Health Grants Could Be Jeopardized: Here’s Why!