The U.S. House of Representatives is considering a bill that would reverse a Biden administration rule restricting short-term health insurance. The legislation aims to restore previous regulations allowing these plans to last up to 36 months, instead of the four-month limit imposed by the current administration.
Supporters argue that the rule change would provide more affordable coverage options for individuals who need temporary insurance due to job transitions, financial constraints, or other circumstances.
A bill introduced in the U.S. House of Representatives seeks to repeal a Biden administration rule that restricts short-term health insurance and separates fixed indemnity insurance from comprehensive health coverage (see TOP 100 Health Insurance Companies in the U.S.).
Republican Rep. Earl L. Carter of Georgia stated that the bill would expand access to lower-cost temporary health plans by eliminating federal restrictions.
Carter, along with Republican lawmakers from Texas, Pennsylvania, and Louisiana, sponsored the legislation.
The bill would extend short-term health insurance coverage to 36 months, reversing the Biden administration’s four-month cap. The current rule also mandates disclosures on short-term and fixed indemnity insurance, outlining coverage details, payment limits, and distinctions from comprehensive plans (see Fitch’s outlook for U.S. Health Insurance Sector).
J.P. Wieske, executive director of the Health Benefits Institute, criticized the rule, stating that fixed indemnity and short-term plans provide valuable options. He argued that states have traditionally overseen these products and that the Biden administration’s regulations interfered with state authority while limiting consumer choice.
Fixed indemnity and short-term limited duration coverage are important products to consumers. States have long regulated these products, and the Biden administration rules not only interfered with state regulation but would have eliminated consumer choice.
J.P. Wieske, executive director of the Health Benefits Institute
Short-term health insurance has been a political battleground for years. The Obama administration imposed limits on plan durations in 2016, while the Trump administration reversed those restrictions in 2018, expanding the maximum coverage period to 36 months with two renewal options.
The Biden administration reinstated stricter rules, citing concerns that short-term plans do not provide adequate protection for policyholders. This latest bill represents another attempt to shift policy in favor of deregulating short-term insurance markets.
Republican lawmakers backing the bill contend that federal restrictions on short-term health plans limit consumer choices and increase costs.
They argue that removing these limits would allow individuals to purchase coverage that better suits their needs without being forced into expensive long-term plans. Critics of the Biden administration’s rule believe it unfairly narrows health insurance options, particularly for those who do not qualify for subsidies under the Affordable Care Act.
The bill also challenges provisions requiring insurers to disclose details about short-term and fixed indemnity plans, such as coverage limits and differences from comprehensive insurance. Proponents of the repeal claim that these federal mandates create unnecessary regulatory burdens, while opponents argue they protect consumers from misleading marketing and inadequate coverage.
If passed, the legislation would return oversight of short-term health plans to states, allowing them to regulate plan durations and terms without federal intervention.
Lawmakers supporting the bill believe state-level regulation offers a more flexible approach that can accommodate diverse consumer needs. However, opponents warn that weakening federal rules could leave individuals exposed to inadequate coverage, higher out-of-pocket costs, and potential gaps in care.
The debate over short-term health insurance reflects broader disagreements on health policy, with some advocating for fewer regulations and more market-driven options, while others emphasize stronger consumer protections and comprehensive coverage standards.
The bill’s fate in Congress remains uncertain as it faces opposition from Democratic lawmakers and consumer advocacy groups who argue that maintaining restrictions on short-term plans is necessary to ensure affordable, reliable health insurance.