Under Biden’s proposal, consumers who buy a short-term plan then fall ill would lose their coverage when their plan expires within four months. When that happens, they would be unable to re-enroll in new insurance for up to a year. Biden’s proposal would turn what would have been insured medical conditions under renewable plans into uninsurable preexisting conditions.
Similar rules left 61-year-old Phoenix resident Jeanne Balvin with nearly $100,000 in unpaid medical bills. In 2016, over the objections of insurance regulators, President Barack Obama briefly imposed similar rules limiting short-term plans to three months and banned renewals.
In April 2017, Balvin purchased a short-term plan. That June and July, she required multiple emergency surgeries and hospitalizations for diverticulitis. Her short-term plan paid her claims promptly and in full — until Obama’s three-month clock ran out at the end of June. When that happened, she lost her coverage and she could not enroll in another plan. Obama’s three-month rule had turned her diverticulitis into an uninsurable pre-existing condition, and Obamacare would not take her until January under its rules for open enrollment.
In short, Obama’s rules limiting short-term plans left her sick, uninsured, and with $97,000 in medical bills.
So much for Biden’s campaign promise that, under his presidency, “If you like your…private insurance, you can keep it.” His proposal would mandate the very practice of stripping coverage from the sick that he had promised ObamaCare would end.
Overall, the Congressional Budget Office estimates such rules would oust 1.5 million people from their current plans, of which 500,000 would lose coverage entirely.
What’s happening is that renewable short-term plans compete with ObamaCare. Indeed, for many families, they are the better option. Biden wants to force people into ObamaCare by crippling the competition.
ObamaCare is offering increasingly low-quality — one might even say “junk” — coverage with sky-high premiums. Coverage for many expensive conditions is growing ever-thinner. Choice of providers and health insurers is dwindling. In 2021, when the average ObamaCare family premium exceeded $17,000 annually (despite average deductibles near $8,000), Democrats grew so nervous, they extended premium subsidies to households earning up to $600,000 per year. The average family premium currently exceeds $18,000.
In contrast, “short-term, limited duration insurance” offers broader provider networks and as much coverage as consumers want. According to the CBO, they do so at premiums “as much as 60 percent lower” than the lowest-price ObamaCare plans. They can do these things because Congress explicitly exempts short-term plans from the regulations that are dragging down ObamaCare. The CBO and other non-partisan groups estimate that short-term plans reduce the uninsured by between one million and 2.3 million.
In 2018, the Trump administration clarified that federal law leaves consumers free to purchase short-term plans that last up to 36 months, to purchase multiple consecutive policies in advance, and to purchase renewal guarantees.
