While Congress was on its Independence Day recess, the Biden administration released a proposed regulation it claimed would “protect consumers from scam insurance plans and junk fees.” In reality, it does just the opposite.
Consistent with the left’s definition of “consumer protection” as “a regulation that protects (i.e., prohibits) an individual from being a consumer,” the proposed rule would shut down a form of health coverage that competes with Obamacare-style plans. As a result, the rule would shift more people onto the Obamacare exchanges — the real form of junk insurance.
New Regulation Repeals a Trump Reform
The proposed rule would undo a regulation finalized by the Trump administration in 2018, as a result of an executive order Trump issued the prior October. That rule allowed for the sale of short-term, limited-duration insurance (STLDI) plans that last 12 months, along with renewals that could extend the initial contract to up to 36 months.
Changing the maximum length of an STLDI policy had an important effect because this type of coverage does not have to comply with all of the Obamacare insurance regulations — the same requirements that more than doubled the cost of individual insurance over just four years. In other words, by extending the maximum length of an STLDI policy, the Trump administration provided an off-ramp for people who considered Obamacare plans too expensive or did not want to buy that much coverage.
The Biden proposal would change the maximum duration of an STLDI plan to a three-month initial
