President Joe Biden announced a series of health moves Friday aimed at protecting unwitting Americans from what he described as unfair fees and dubiously marketed health plans, signaling what could be a key part of his health agenda ahead of the 2024 election.
Biden has made lowering health care costs and eliminating “junk fees” of all stripes a hallmark of his time in the Oval Office, and this most recent focus on insurance costs comes as the 2024 GOP primary field begins to shape up.
The trio of policies rolled out Friday morning target some of the more wonky aspects of health policy — limiting the duration of short-term health insurance, preventing providers from finding loopholes in a surprise billing law and kicking off an investigation into medical debt loans and credit cards — but taken together the White House is using the policies to illustrate Biden’s economic agenda.
At a Friday afternoon event announcing the proposals, the White House brought out a man who had a short-term health care plan and ended up with a $37,000 hospital bill after getting his appendix removed. Biden pointed to his story as an example of what his policies would eliminate.
“In America, it sounds corny, but fairness is something we can kind of expect. And I don’t know anybody who likes being used, played for a sucker,” Biden said.
The president tied the new health care policies to his administration’s economic successes, a theory he called “Bidenomics,” pointing to low unemployment rates, decreasing inflation and record low uninsurance rates.
“Premiums on the Affordable Care Act are $800 less per person than before I took office. And that’s Bidenomics,” Biden said, referring to the 2010 health care law.
Polls already show health care affordability is an important issue for the public heading into the 2024 presidential election among both Democrats and Republicans; a recent Pew Research Center poll showed 64 percent of those surveyed considered health care affordability a “very big problem,” second only to inflation as the top-rated issue.
But the short-term plan proposal is the most directly political, as it rolls back a signature health policy from the Trump administration.
The new short-term plan rule proposed Friday by the Centers for Medicare & Medicaid Services takes steps to ensure plans are meant to be a temporary bridge, not regular health coverage. The proposal limits short-term plans to three months, with a maximum of four months if extended, rather than the up to three-year short-term plans allowed by the Trump administration. The proposed rule also would prevent these short-term plans from mimicking comprehensive health insurance.
Reaction to the plan
Republicans argued that the changes would take away coverage from Americans looking for cheaper options.
“An affordable insurance option for many Americans is now under attack by the Biden Administration, whose top-down, one-size-fits-all approach to health care has only driven up insurance premiums for millions of Americans,” said Ways and Means Chairman Jason Smith, R-Mo.
But Democratic lawmakers and the health care industry welcomed the news.
House Education and Workforce ranking member Robert C. Scott, D-Va., said Biden’s proposal reining in short-term health plans counteracts the Trump administration’s attempts “to sabotage the Affordable Care Act and destabilize our health care system.”
On a call with reporters Thursday, a White House official said the short-term plan rule revision took a back seat to other health priorities during Biden’s first couple of years.
Because short-term plans are currently exempt from most of the rules governing health coverage under the 2010 health care law, they can deny or charge people more based on health status. The Association for Clinical Oncology said cancer patients often purchase these plans not knowing how little coverage they actually offer.
“Reining in these barebones plans, combined with the now more generous subsidies available to purchase quality coverage on the exchange, will help millions of Americans get the kind of coverage that they need, especially when facing an unexpected illness like cancer,” said Association of Clinical Oncology Board Chair Everett Vokes.
Stacey Hughes, executive vice president of the American Hospital Association, agreed that the plans could help shield patients from unexpected coverage denials.
But the libertarian-leaning Cato Institute’s Michael Cannon argued that the Trump-era short-term plans helped reduce the number of uninsured Americans and offered a viable alternative for those who could not afford insurance plans on the exchanges.
Surprise billing
The surprise billing guidance looks to stop insurers and providers from finding loopholes in the 2021 law. It specifically ends abuse of the “in-network” designation and the practice of charging patients for facility fees outside of hospitals.
Biden said Friday that since the law was implemented in early 2022, 1 million Americans are protected from surprise bills each month. Laughing with the crowd, he compared hidden facility fees to resort fees at a hotel.
“Evading the law and playing games to charge patients outrageous prices has to end,” he said.
The administration’s efforts on medical debt, meanwhile, are an acknowledgment that even with insured rates at record highs, health costs continue to rise and millions of Americans are saddled with debt from seeking care.
The Consumer Financial Protection Bureau, the Department of Health and Human Services and the Treasury Department issued a “request for information” Friday that could guide regulation on medical credit cards and medical loans, which patients use to pay for health care services, often at the suggestion of their doctors.
But the loans and cards often come with high interest rates, leaving patients with debt they may be unable to pay off, the Biden administration says.
People paid $1 billion in deferred interest on health care cards from 2018 through 2020, according to the CFPB. White House Press Secretary Karine Jean-Pierre said the agencies would ensure the credit card companies are “adhering to consumer protections.”
Advocates for tackling medical debt urged the administration to prohibit health care professionals from promoting medical credit cards and to prohibit the inclusion of medical debts on credit reports.
“Patients trust their doctors. When their health care professionals offer a ‘medical credit card,’ there is an implied trust that extends to these financial instruments,” said Patricia Kelmar, senior director of U.S. Public Interest Research Group. “However, these cards are driving patients into more consumer debt if they miss a payment and owe high late fees and retroactive interest.”
She said physicians and their staff should instead help patients use their insurance and screen them for public health or charity care programs.
The announcement from the Biden administration comes after the three credit reporting companies removed medical debts under $500 from credit reports. Advocates have urged the bureaus to remove all medical debt; $88 billion of outstanding medical bills are currently in collections, affecting 1 in 5 Americans, according to the CFPB.
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