WASHINGTON, 28th March, 2024 (WAM) -- President Joe Biden on Thursday announced new steps to protect consumers who buy short-term health insurance plans, Associated Press reported.
A new rule finalised by the Democratic president's administration will limit these plans to just three months. And the plans can only be renewed for a maximum of four months, instead of up to the three years that were previously allowed.
The Biden administration is also requiring short-term plans to provide consumers with clear explanations of the limits of their benefits.
The White House said the rule is part of Biden's efforts to reduce costs for consumers, which he has been promoting extensively.
“The president really believes the American people do not want to be taken for suckers and junk insurance takes them for suckers,” Neera Tanden, Biden's domestic policy adviser, said during a call the White House arranged to discuss the rule with reporters.
Short-term insurance is meant to be temporary, providing a safety net for consumers as they transition between jobs, for example, or retire before they are eligible for Medicare.
But short-terms plans — critics call them “junk insurance” — too often mislead consumers into thinking they were buying comprehensive health coverage, Tanden said. Consumers would later be surprised to learn when they tried to use the insurance that their benefits were capped or certain coverages were not provided, she added.