The proposed rule was announced Friday as part of a series of actions aimed at lowering health care costs.
It would limit the duration of the insurance plans to three months, with the option of a one-month extension. If the proposal is made final, it would apply only to new plans, not existing ones.
“It sounds corny, but fairness is something we kind of expect and I don’t know anybody who likes to be viewed as having been played for a sucker, taken advantage of,” President Biden said Friday in remarks highlighting the moves.
Biden tied them to his administration’s ongoing work to combat “junk fees” in other industries like airlines, ticketing and internet providers.
“Junk fees may not matter to the very wealthy — and it’s not the wealthy’s fault by the way — but they matter to working folks in homes like the ones I grew up in,” he added.
Short-term or “skinny” plans are offered outside the traditional ObamaCare exchanges. They are sold directly to consumers by insurance companies and are cheaper to purchase. People can buy them at any time without a special enrollment period.
But the plans don’t need to follow ObamaCare rules, meaning they can charge people with pre-existing conditions higher premiums and leave out coverage of certain health services.
Democrats call them “junk plans,” and have been pressing the White House since Biden took office to roll back the Trump administration’s rule that allowed the plans to last up to a year and be renewed for up to three years.
Insurers and Democrats say Trump’s rule encouraged young, healthy people to leave ObamaCare plans, which raised premiums for the people remaining.
Supporters of the plans say they offer a cheaper safety net for people in between jobs, who work in the gig economy, or those who just can’t afford a traditional ObamaCare plan.
Michael Cannon, director of health-policy studies at the libertarian Cato Institute, wrote in a blog post last month that “just about anything the administration proposes would eliminate consumer protections and throw sick people out of their health plans.”
