Short-term health insurance companies will no longer be able to deny coverage for preexisting conditions and take advantage of other loopholes in the Affordable Care Act under new rules the Biden administration proposed Thursday.  

What You Need To Know

  • Short-term health insurance would be limited to four months under a new rule the White House proposed Thursday

  • Temporary heath insurance coverage providers will also need to explain what is and what is not included

  • As many as 1.9 million Americans have short-term health insurance that provides temporary coverage as they transition from one source of health insurance to another

  • People who currently have short-term health insurance can renew their policies according to the terms of their current plans; the new rules will take effecct in 60 days

“Some types of insurance plans, like short-term limited-duration insurance, don’t provide comprehensive coverage,” White House domestic policy adviser Neera Tanden, said Wednesday during a briefing about the new rules. “Importantly, they don’t have to comply with critical ACA protections” such as covering preexisting conditions.

Short-term insurance plans are intended to provide temporary coverage to people as they transition from one source of health insurance to another, Tanden said. As many as 1.9 million people are enrolled in short-term health insurance, according to the White House.

Calling short-term plans “junk insurance,” Tanden said they mislead consumers into thinking they are buying full-coverage health insurance when in reality their coverage is capped or health conditions are not included at all.

The new rule would limit short-term care to no more than four months. Insurance companies will also have to provide clear disclaimers that explain to customers what is and is not covered and provide information on how to buy additional coverage.

People who are currently enrolled in short-term plans will be able to keep that coverage and renew it according to the terms of their current plan. The new rules will take effect in 60 days.