Oct 19, 2022 - Health

Hill Dems frustrated with Biden inaction on "junk" health insurance

Illustration of a donkey pulling a giant health plus.

Illustration: Aïda Amer/Axios

The Biden administration is catching flak from congressional Democrats upset that it hasn't limited "short-term" health insurance plans that can erode the Affordable Care Act's insurance markets.

Why it matters: The Trump administration promoted these cheaper plans that offer fewer benefits, which have been derided by Democrats for not meeting ACA coverage requirements and for the way they can deny coverage to people with pre-existing conditions.

  • But almost two years into the Biden administration and with the ACA enrollment season due to begin next month, the plans remain available and could draw healthier enrollees away from ACA exchanges, potentially skewing risk pools.

What they're saying: Sen. Tammy Baldwin (D-Wis.) said in a statement to Axios that she is "frustrated" the Biden administration has not "moved quicker" to roll back the short-term plans, despite the progress it's made on other health policies.

  • "The Biden administration’s failure to react swiftly to junk insurance only puts more consumers at risk," Rep. Lloyd Doggett (D-Texas) said in a statement to Axios.

Between the lines: The Trump administration expanded short-term health insurance plans from a three-month limit imposed under President Obama to a full year, and allowed them to be renewed for up to 36 months.

  • Critics point out the plans do not have to pay for prescription drugs or mental health, and can exclude coverage of pre-existing conditions.
  • They also say people can be lured to the plans by deceptive marketing and left on the hook for huge medical bills.

The other side: Brian Blase, a former Trump administration health official who's now president of the Paragon Health Institute, said the plans offer people another option, with "flexible, affordable" coverage. But he said he is "surprised" that the Biden administration has not yet moved to restrict them.

Go deeper: Patient advocacy groups including the Leukemia & Lymphoma Society met in August with administration officials including Centers for Medicare and Medicaid Services administrator Chiquita Brooks-LaSure, who said action on short-term plans was a priority, according to Katie Berge, the group's federal government affairs director.

  • "They keep saying 'soon,' but I don't know if you can call it 'soon' if you say it for two years," Berge said.
  • Health and Human Services Secretary Xavier Becerra also publicly told Baldwin at a Senate hearing five months ago that "we are in the midst of rulemaking" on the issue given that short-term plans "are leaving Americans with these tremendously expensive bills."
  • HHS previously announced its intent to take regulatory action, but it is not clear when it will follow through.
  • "As part of our commitment to a robust and competitive marketplace, and ensuring all Americans have access to the high-quality, affordable health care they deserve, we are working as quickly as we can through the regulatory process to address this critically important issue," an HHS spokesperson told Axios on Tuesday.

By the numbers: There is no precise data for how many people are enrolled in short-term plans. A report from House Democrats in 2020 found enrollment increased to about 3 million people as of 2019. Blase said he thinks that estimate is too high.

What's next: Sen. Chris Murphy (D-Conn.) said he wants action before the ACA sign-up period begins on Nov. 1. "The Biden administration should act to put an end to this before the 2023 open enrollment period begins next month," he said.

  • Democrats have touted other health care moves, like lowering prescription drug prices, ahead of the midterm elections. But some vulnerable lawmakers want to see action on short-term plans.
  • "It's critical we eliminate these 'junk' plans to ensure that Americans are not being taken advantage of," said Rep. Angie Craig (D-Minn.).
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