What does the Biden executive order mean for short-term health insurance plans?

February 2, 2021
Steven Cutbirth

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On January 28th, President Biden signed an executive order instructing the HHS Secretary to establish a special enrollment period for the federal marketplace and revokes two Trump era executive orders with the hope of reinforcing the ACA.

Of particular interest to short-term insurance plans is Section 4, which revokes a Trump era executive order (Executive Order 13813 — Promoting Healthcare Choice and Competition Across the United States), that expanded availability of short-term, limited-duration insurance plans.

The original order allowed these plans to cover longer periods (Obama had set a 90 day limit for members of short-term plans) and be renewed by the consumer with the hopes of increasing insurance options for consumers who are unable to afford other coverage.

To clarify, the executive order does not change any law. It merely directs heads of agencies to review the Trump executive order and determine whether it is in line with the Biden campaign’s policy “to protect and strengthen Medicaid and the ACA and to make high-quality healthcare accessible and affordable for every American.”

If they determine that the old order is not in line, they will then propose rules that are in line with the Biden campaign and publish them for notice and comment. This is a process that generally takes months.

So what will likely happen? Your guess is as good as mine, but I expect that the administrators will come back saying that allowing consumers to buy short-term plans for longer periods undermines the healthcare marketplace by removing healthy consumers, thereby driving up premiums on the marketplace. And since the Biden campaign wants to reinforce the marketplace, they will reduce the allowed term of a short-term plan and possibly even reinstate a rule saying that consumers are not allowed to renew their short-term plans.

There are tons of pros and cons that could be debated on this policy, but for now, we will wait until the administrators come back with proposed rules and/or changes to existing policies.

If you are interested in reading more about the Biden executive order and what is covered, I would recommend reading Health Affairs’ detailed recap here.

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