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It’s generally a good thing when the Biden administration repeals a Trump-era administrative rule. Under current ACA marketplace conditions, a rule proposed by HHS, Treasury and the Department of Labor to restore a three-month term limit on so-called Short Term, Limited Duration (STLD) health plans is a good thing. In a rule finalized in August 2018, the Trump administration extended the allowable duration of such plans to a year, renewable for up to three years, creating an alternative market to the ACA-compliant individual market.
STLD plans by legal definition are not insurance and not subject to regulation by the ACA, HIPAA, the No Surprises Act, or the law mandating parity between physical and mental health coverage (MHPAEA). STLD plans are medically underwritten, meaning that applicants with pre-existing conditions can be charged more, denied coverage altogether, or offered coverage with the pre-existing condition excluded. These plans do not have to cover the ACA’s Essential Health Benefits and often exclude drug coverage and mental health care. They often have no provider network - -instead, they set their own rates in payment to medical providers and thus leave enrollees subject to extensive balance billing — which is still possible, as these plans are not subject to the No Surprises Act, which began protecting people in ACA-compliant plans in 2022. (In many markets, however, United HealthCare does offer STLD plans that have a provider network.)
For the Trump administration, which inherited Republicans’ dead-end opposition to and demonization of everything ACA, STLD plans represented a kind of ideal, harking back to the Shangri-la of the pre-ACA individual market, in which plans without restrictive provider networks (and with coverage limitations similar to those of STLD plans) cost lucky, healthy enrollees considerably less than unsubsidized ACA-compliant plans would later cost. Seema Verma, Trump’s CMS director, lionized “choice” — a market teeming with lightly regulated options offering very partial coverage — and that is what the Trump administration created. Verma even floated ACA “waiver concepts” inviting the states to seek approval for providing federal subsidies for ACA-noncompliant plans.
