In an effort to prevent short-term health insurance companies from exploiting loopholes in the Affordable Care Act, the Biden administration has proposed new rules. Under these changes, short-term health insurance coverage will be limited to four months and insurers will be required to clearly outline what is included and excluded in their plans.

Critics argue that these short-term plans do not offer comprehensive coverage and do not have to comply with important ACA protections, such as covering preexisting conditions. White House domestic policy adviser Neera Tanden has criticized these short-term plans as “junk insurance,” as they can mislead consumers into believing they are receiving full-coverage health insurance when in reality their coverage is limited or certain health conditions are not covered at all.

The new rules aim to provide greater transparency and protection for consumers by limiting the duration of short-term plans and requiring insurers to clearly explain the scope of coverage. Despite the changes, individuals currently enrolled in short-term plans will still be able to renew their coverage according to the terms of their existing plans. The changes are expected to take effect in 60 days, providing more clarity and consumer protections for those utilizing short-term health insurance.