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The rule, first introduced last July, places tighter
restrictions on short-term insurance products that are supposed
to serve as a lifeline for more than 1 million Americans who
rely on stop-gap insurance, such as when switching jobs.
The Biden administration says companies exploited changes made
under former President Donald Trump that allowed watered-down
insurance plans to be offered for a much longer period, up to
three years, often resulting in surprise medical bills,
Short-term insurance plans misled consumers into thinking they
were buying comprehensive health insurance, but included things
like low caps on benefits and no coverage for pre-existing
conditions, said Neera Tanden, who serves as the domestic policy
adviser to President Joe Biden.
"That's not really insurance. That's a scam and the president
really believes that the American people do not want to be taken
for suckers," Tanden said.
The administration of Barack Obama in 2016 limited short-term
insurance plans to three months to try to get more people on
year-round plans, but regulations adopted by the Trump
administration in 2018 allowed people to stay on such plans for
12 months and renew them for three years.
The final rule finalized on Thursday by the Department of Health
and Human Services would restrict plans to three months, with
only a short extension, Tanden said. It would also require
companies to explicitly and more clearly disclose what's covered
and what's not, she added.
U.S. inflation has fallen, job growth and spending continue to
be strong and overall the U.S. economy is performing better than
expected. But the high cost of consumer items from groceries to
housing is contributing to American voters' concerns about
Biden's economic policies.
Biden has successfully pressured companies such as Airbnb and
Live Nation to limit junk fees, or extra charges, that customers
pay when booking concert tickets, hotels and airfares. The
administration has also forced credit card customers to slash
late fees, from an average of $31 down to $8.
The White House Council of Economic advisers estimates that the
administration's actions will eliminate more than $20 billion in
junk fees annually.
(Reporting By Jarrett Renshaw; Editing by Bill Berkrot)
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