Biden to outline efforts to crack down on ‘junk’ insurance, hidden medical costs

President Biden on Friday will announce steps to crack down on “junk” insurance and loopholes that leave Americans with surprise medical bills.

His administration will propose rules that shorten the duration of short-term plans, which critics refer to as “junk plans,” to three or four months at most, instead of the three years allowed by the Trump administration.

The administration says the plans are often misleading and do not cover the suite of conditions required by Obamacare plans, the signature Democratic program that Mr. Biden is promoting.

“These [short-term] plans leave families surprised by thousands of dollars in medical expenses when they actually use health care services like a surgery,” a White House fact sheet says.

The administration pointed to a case in Montana where a man faced a $43,000 bill because his short-term insurer claimed his cancer was an uncovered preexisting condition.

The administration is also cracking down on a loophole in which health plans contract with hospitals but then say some services at the site are not covered.

For instance, sometimes a pregnant woman delivers her baby at an in-network hospital “only to find out that the anesthesiologist who cared for her is actually out-of-network,” the fact sheet says.

The administration will tell health providers to declare services either out-of-network or in-network instead of being in some hazy middle-ground.

Another aspect of the initiative will crack down on doctors and hospitals that sign patients up for third-party medical credit cards and loans to help pay for care.

“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,” the White House said in a fact sheet.

Mr. Biden will outline his crackdown on fees and hidden costs in a speech from the White House East Room on Friday.

It is part of his campaign to promote “Bidenomics” ahead of the 2024 election cycle. Mr. Biden says his economic vision is focused on building the middle class and contrasts with trickle-down “Reaganomics,” but the pitch comes with perils, given Republicans are blaming Mr. Biden for high government spending and consumer inflation that is battering Americans’ wallets.

Also Friday, Mr. Biden will promote the impact of a part of his signature tax-and-climate bill that capped out-of-pocket spending on medicines for seniors in Medicare’s prescription-drug benefit at $2,000 per year.

The administration said nearly 19 million, or about one in three seniors enrolled in Medicare Part D, will save an average of $400 per year when the provision goes into effect in 2025. Nearly 2 million enrollees who use high-cost drugs will save $2,500 per year.

Overall, the administration expects seniors to save $7.4 billion per year in their out-of-pocket spending.

“The Biden-Harris Administration is committed to helping seniors and people with disabilities save money on the medications they need and ensuring hardworking families have insurance when they need it,” said Health and Human Services Secretary Xavier Becerra.