Feds propose rules to limit ‘junk’ health plans to 4 months, keep them from ‘gaming the system’; seek info on health credit cards
By Jennifer Shutt
States Newsroom
The Biden administration announced new initiatives Friday that could reduce health-care costs, though none will take effect immediately.
The changes include a proposed rule that would reduce the amount of time short-term health-insurance plans can last, and requirethe plans to be more transparent about what is covered and what isn’t.
Also, the White House is seeking information about high-interest-rate credit cards that doctors’ offices offer to help people pay for their care, and telling hospitals that patients are either in-network, with billing limitations in the Affordable Care Act, or out-of-network, with costs covered by a more recent law, the No Surprises Act.
White House Domestic Policy Advisor Neera Tanden told reporters Thursday that the proposed rule, which could be finalized later this year, would help Americans to understand the difference between health insurance offered under the Affordable Care Act and what she called “junk insurance.”
Those short-term plans, Tanden said, “are intended to provide temporary coverage as people transition from one source of coverage to another, like when we’re between jobs,” but during the Trump administration, the plans were allowed to last as long as three years, she said.
Tanden said the short-term plans have left some people with thousands of dollars in medical debt, including a Montana man who had $43,000 in medical bills after a short-term plan denied him cancer coverage by saying it was a pre-existing condition.
The proposed rule would limit short-term plans to three months with a one-month renewal option, and “require plans that discriminate based on pre-existing conditions and don’t offer comprehensive benefits to disclose their limits clearly to consumers,” Tanden said.
On surprise medical billing, the Department of Health and Human Services is sending guidance to hospitals that Biden administration officials hope will reduce or eliminate people receiving thousands in medical bills they did not expect.
“We’re making it clear that plans and providers cannot evade surprise billing rules simply by changing the terms they use in their contracts,” Tanden said. “Some health plans contract with hospitals, then try to claim that they are not technically ‘in network.’ Frankly, what they are doing is gaming the system. This is not allowed and, as our guidance will describe, it must end.”
A senior administration official, speaking on background to describe details of the guidance, said it should clarify that there is no space between the protections for out-of-network costs covered under the federal law known as the No Surprises Act, or protections in the Affordable Care Act for in-network costs.
“We are saying there is no gray area here,” the official said. “It is either the protections of the No Surprises Act, or the protections for out-of-pocket costs.”
The other initiative from the administration unveiled Friday requests information from the public about credit cards and certain types of loans that are often offered to people to help them pay for health care.
Tanden said people signing up for such cards may not understand how they work because they “often include teaser rates and deferred interest features that lead to higher costs for consumers.”
A second senior official, also speaking on background, said the cards often have interest rates that are much higher than a regular card. They are sometimes offered to patients in a health-care provider’s office.