President Joe Biden announced Friday he’s continuing to use his executive power to build on the Affordable Care Act and strengthen consumer health protections with three new measures to reduce costs and medical debt, and to crack down on junk health insurance, calling the new actions a “core pillar” of the “‘Bidenomics’ agenda.”
The administration is going to close the loopholes on junk insurance plans Donald Trump created; strengthen guidance on surprise medical billing to further restrict providers; and deputize a trio of agencies to investigate how to protect people from scam medical debt credit cards and loans. “No one should go bankrupt trying to get and keep themself or their family healthy,” Centers for Medicare and Medicaid Services Administrator Chiquita Brooks-LaSure said in a statement. “CMS is committed to a more transparent, fair, and accountable health system for the people we serve.”
The ACA allowed for short-term, limited duration insurance that didn’t have to comply with the whole set of rules for standard insurance plans created under the law. They were intended as bridge policies for people with changing life situations and coverage needs, and could be held for no more than three months. Companies were not allowed to sell them on the ACA health exchanges. Trump changed all that in 2018, allowing states to let these cheap, bare-bones plans onto the exchanges and extending the duration of them to three years.
Plenty of people were duped into buying these plans, not realizing they didn’t provide all the protections they thought they were getting. There’s the Pennsylvania plumber, for instance, who went to the doctor feeling unwell, and indeed ended up in the hospital for a week with heart failure and previously undiagnosed Type 2 diabetes. He thought he had insurance, but was shocked to get a $35,000 hospital bill. That was back in 2019, and it’s continued until now.
Neera Tanden, director of the White House Domestic Policy Council, highlighted one of these cases in a call with reporters ahead of the announcement, a Montanan who received a $43,000 bill for cancer care, after the insurer determined it was a pre-existing condition. “That’s not real insurance—that’s junk insurance,” Tanden said. “We will propose a rule to crack down on these plans.”
In the meantime, about half of the states have acted on their own to ban or restrict these plans. The Biden-proposed rule will roll back their duration to the original ACA limit of three months, with a possible one-month extension, and insurers marketing the plans will have to provide prominent disclaimers about the limits of coverage.
Since Congress passed and Biden enacted a law in 2021 to eliminate surprise billing, loopholes have emerged and providers have been taking advantage of them. The most common instance of surprise billing is getting a procedure at a hospital that’s in your insurance network, but having a lab test, or a consulting provider advising on your case who is not in-network, etc., who then invoice a person separately, charges the insurer won’t pay.
The White House says that the existing rules are “already preventing as many as 1 million surprise medical bills every month,” but some plans have been getting around the rules by contracting with hospitals and claiming those hospitals are not technically in-network in independent dispute resolutions. “New guidance will help stop providers from gaming the system by evading the surprise billing rules with creative contractual loopholes that still leave consumers with unexpected costs,” the White House says.
Finally, Biden is directing Health and Human Services, the Consumer Financial Protection Bureau (CFPB), and the Department of Treasury “to explore whether health care provider and third-party efforts to encourage consumers to sign up for medical credit cards and loans are operating outside of existing consumer protections and breaking the law.”
The administration has already deputized the CFPB to investigate credit reporting companies and debt collectors who aggressively harass and intimidate people who owe medical debts, and to provide more consumer education tools to help patients navigate medical debt and billing.
But medical debt remains a problem. A 2022 Kaiser Family Foundation survey found that 13% of uninsured adults are more likely to report having significant medical debt than insured adults, at 9%. The burden of high debt also falls disproportionately on Black and brown people—27.9% of households led by a Black person have medical debt, compared to 21.7% of households led by a Hispanic person, and 17.2% of households led by a white person.
The administration is putting all this in the “Bidenomics” bucket, along with its crackdown on “junk fees”: “cracking down on bounced check and overdraft fees in the banking industry, which is saving consumers more than $5 billion every year; proposing rules to require airlines to disclose all of their fees up front and successfully pushing a number of airlines to end family seating fees; and mobilizing private sector action to eliminate hidden junk fees for concert and sports tickets.”
It’s also part of strengthening the ACA while making health insurance more affordable for more people. Trump and the Republicans did their damnedest to undermine the law, once they finally accepted the reality that they weren’t going to be able to repeal it. Biden has had a job on his hands in stabilizing it, building it back, and ultimately, making it better.
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