Democratic senators ask Biden administration to limit “junk health plans” that are not ACA-compliant

Bruce Henry - President

“Junk plans are leaving Americans with these tremendously expensive bills,” says Xavier Becerra, secretary of Health and Human Services.

By Alan Goforth

Affordable Healthcare Ahead.Jim Vallee/Adobe Stock More than two dozen Democratic senators this week asked the Biden administration to rein in short-term health plans that don’t follow minimum coverage standards set by the Affordable Care Act. “We must protect those who will be looking for coverage in the near future and take steps to ensure that these plans are not allowed to further proliferate,” they wrote in a letter to Xavier Becerra, secretary of Health and Human Services. “It is past time for your department to step up and address the expansion and proliferation of junk plans.”

The ACA requires that insurance plans limit out-of-pocket costs and provide several essential health benefits, including mental health and substance-abuse treatment; prescription drug coverage; and maternity care. The ACA also bars insurance plans from retroactively dropping coverage; rejecting applicants or charging them higher premiums because of preexisting health conditions; and imposing lifetime or annual caps on coverage.

However, short-term plans, which have been expanding since given a boost by former President Donald Trump in 2018, are not required to follow these standards. The pending end to Medicaid coverage for millions of Americans in April could provide an opening for these short-term plans to spread, the senators cautioned.

“According to estimates from your department, approximately 15 million individuals will lose 
Medicaid or CHIP coverage in the coming year and will therefore require affordable health care coverage,” the letter says. “Millions will be eligible for significant financial assistance to purchase comprehensive coverage on the marketplace. But without additional protections, many Americans could find themselves enrolled in junk plans that do not provide comprehensive coverage or protection for individuals with preexisting conditions.”

Last May, senators questioned Becerra about when and how the Biden administration will take action against junk plans. “We are in the midst of rule making,” he said at the time. “As you know, rule making can take a little while, but we started that process because of what you’ve explained. It does happen. Junk plans are leaving Americans with these tremendously expensive bills.”

Related: Employees increasingly want ACA marketplace health plans, report says

Sen. Tammy Baldwin, D-Wis., says she previously has called on HHS and the Centers for Medicare & Medicaid Services to address short-term plans. She wrote bills in 2021 to 
overturn the Trump administration’s expansion of the plans and to require stronger regulations “to protect consumers from being misled into enrolling in junk plans that fail to offer comprehensive coverage

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