The Biden Administration Is Considering Rules to Combat ‘Junk Fees’ in Health Insurance.


The administration of President Joe Biden has suggested limits on “junk insurance” plans that do not fulfill the criteria of the Affordable Care Act.

The White House stated in a Friday (July 7) fact sheet that these short-term plans took advantage of loopholes that allowed them to bypass some of the act’s obligations.

“If finalized, the rule would limit so-called’short-term’ plans to truly short time periods, close loopholes made worse by the previous administration, and establish a clear disclosure for consumers of the limits of these plans,” the White House stated in the information sheet.

According to the information sheet, one proposed modification would limit short-term health insurance to three months, or four months if extended, rather than the present limit of three years.

Another requirement is that dealers of income replacement “fixed indemnity” plans clearly state that these plans do not provide complete health insurance.

According to the information sheet, a third provision in the guidelines would require explicit disclosures of the limits of plans’ benefits to both new purchasers and existing consumers.

According to the information sheet, these recommendations are intended to minimize the unwanted shocks that customers have experienced when they discovered that their short-term policies did not cover pre-existing illnesses or other treatments that they assumed would be covered.