Amid his second “Investing in America” tour, President Joe Biden introduced a set of actions on July 7 designed to reduce health care costs by cracking down on “junk” insurance plans, prevent surprise medical bills, and decrease medical debt related to credit cards.
The Biden administration’s new proposed rule regarding what he called “junk” insurance plans “would close loopholes that the previous administration took advantage of that allow companies to offer misleading insurance products that can discriminate based on pre-existing conditions and trick consumers into buying products that provide little or no coverage when they need it most,” according to a White House fact sheet.
“Under our rule, short-term plans would have to be short-term. That means four months or less, not three years. Insurance companies will also be required to provide a clear disclaimer upfront about what’s covered and what is not covered instead of very limited and fine print,” Mr. Biden said.
Cory Dowd introduced Mr. Biden in the East Room of the White House. The former Peace Corps member said that a few months after having an emergency appendectomy, he learned that his insurance company would cover only “a few thousand dollars” through his short-term policy, and he was responsible for the rest of the $37,000 bill.
“Your story, it turns out, is a very familiar one to many Americans. You try to do the right thing, only get ripped off instead,” Mr. Biden told Mr. Dowd.
“In America, it sounds corny, but fairness is something we kind of expect,” Mr. Biden added. “And I don’t know anybody who likes to be viewed as having been played for a sucker.”
Mr. Biden also announced new guidance originating from the No Surprises Act, a federal law from 2020 that prevents doctors or hospitals in multiple situations from billing insured patients higher rates because the care providers are not part of their insurer’s coverage network.
The new initiative would limit the ability of insurers that contract with hospitals to claim that provided care was not in network and require customers to pay more money. Health plans would also be required to disclose facility fees charged to patients that can arise as an unexpected medical expense.
“Folks, that’s not health insurance. That’s a scam. It has to end,” the president said.
President Biden also said that the Consumer Financial Protection Bureau (CFPB), Health and Human Services Department (HHS), and Treasury Department are collaborating to seek information on third-party credit cards and loans that are used to pay for health care costs.
“These credit cards often include teaser rates and deferred interest features that lead to higher costs for consumers and may be offered even when low- or no-cost alternatives, such as zero-interest payment plans, financial assistance, or health coverage may be available,” a White House fact sheet explained.
Health care providers may promote credit cards “because they could allow providers to get paid faster, outsource servicing and collections costs to third parties, receive a higher payment from consumers who otherwise would pay a discounted price for care, and in some circumstances, receive a share of the interest revenue gained by the third-party financial company,” the fact sheet stated.
Once medical bills are placed on medical credit cards, gaps may exist on how consumer protections apply, according to the White House. Efforts from the CFPB, HHS, and Treasury Department will determine whether providers are operating outside of existing consumer protections, the White House noted.
Mr. Biden also highlighted his plan that allows Medicare to negotiate lower prices for prescription drugs and the $35 per month price cap on insulin for Medicare Part B recipients.
HHS released projections indicating that 18.7 million older adults and other Medicare beneficiaries will save an estimated $400 per year in prescription drug costs in 2025 because of the price cap that was part of the Inflation Reduction Act.
