Both ICHRA and ‘Short Term’ Plans Hurt Working People and Demand Action from Administration

 

June 15, 2021 

​

WASHINGTON, D.C. – In important comments last week, the Biden Administration is making clear it has not forgotten about its pledge to protect working people from dangerous Trump-era health insurance rules. 
 
Keep US Covered is a campaign committed to enhancing quality health coverage and improving care for working Americans. Two of our top priorities are stopping a new ICHRA system that threatens to weaken workplace coverage and allows discrimination in health benefits as well as rolling back rules that boosted short-term, limited duration plans – or junk insurance.
 
And HHS Secretary Xavier Becerra suggested action was coming. “Stay tuned. We are looking to do some things,” the Secretary said in response to questioning from Senator Tammy Baldwin (D-WI). 
 
Senator Baldwin had noted that, “Unfortunately, under the previous administration there were rules changes that allowed the proliferation of plans that I would refer to as ‘junk insurance’ plans that don’t have to provide the same protections based on preexisting conditions, et cetera.”
 
And as the Secretary pointed out, these junk plans give consumers the false impression that they have reliable coverage. “You think you have insurance and you go and use services and, lo and behold, you’re gonna pay out of pocket a whole lot of money,” he said. 
 
Taking action to return short-term plans to serving their original intent – a bridge for short gaps in coverage – would be a win for working people who deserve peace of mind and health coverage that won’t leave them with sky-high medical bills. The administration, too, should follow through on repealing the less-understood, but potentially more dangerous ICHRA system.
 
ICHRAs – Individual Coverage Health Reimbursement Arrangements – are an invention of the previous administration with the potential to significantly weaken coverage for workers. It would allow businesses to divide workers into classes and creates a system of haves and have-nots. Some would continue to receive traditional job-based insurance, while others – based, for example, on their geography or pay-type – would be forced to find insurance on their own on the individual market. Not only does this promote lower quality, more expensive coverage for certain employees, it invites discrimination, particularly for employees who have underlying health conditions or care for a family member with such a condition, and would weaken the risk pool for the Affordable Care Act marketplaces. 
 
Both policies originated from a 2017 executive order signed by former President Donald Trump, and the regulations were finalized late in the last administration. In one of his first actions in office, President Biden signed his own executive order directing relevant agencies to review those final regulations and consider “suspending, revising, or rescinding” them.
 
Keep US Covered and a diverse coalition of campaign partners are working to support President Biden as he works to reverse both of them. You can read more about the Biden EO here as well as ICHRAs and short-term plans on KeepUSCovered.org.