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TRUMP WON’T ENFORCE RULES FOR SHORT-TERM JUNK HEALTH INSURANCE
PLANS  
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F. Douglas Stephenson
August 25, 2025
Informed Comment
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_ The Trump administration is refusing to enforce a Biden-era rule
limiting junk short-term health plans that are notorious for charging
more or denying coverage altogether for people with conditions like
asthma, diabetes, and cancer. _

, Jonathan Borba

 

Gainesville, Florida (Special to Informed Comment) — With the Trump
administration rolling back essential health insurance protections and
rejecting a national, single-payer health insurance program,
America’s race to the bottom continues full steam ahead for millions
of Americans with pre-existing health conditions. The Administration
will now amend the Biden-era rule that limited the duration of
short-term plans to no more than four months, and says it will not
enforce the current rule, including the time restrictions and new
consumer notification requirements, in the interim. It is refusing
to enforce a Biden-era rule limiting junk short-term health plans that
are notorious for charging more or denying coverage altogether for
people with conditions like asthma, diabetes, and cancer.

_STATEMENT FROM ‘PROTECT OUR CARE’ : _Chair, Leslie Dach, issued
the following statement:
“At a time when the health care system is already in crisis, Donald
Trump is launching another attack on people with pre-existing
conditions. Short-term junk plans are allowed to deny coverage, drop
people when they get sick, and exclude life-saving coverage such as
prescription drugs and hospital care, leaving families with sky-high
bills and nowhere else to turn. This is a direct attack on Americans
with pre-existing conditions, putting their health and financial
security at serious risk. It seems the President has forgotten the
2018 midterm election.”

The Trump Admistration sees no need for any regulation regarding junk
plans and fixed indemnity excepted benefits coverage at the Federal
level. Don’t bother, says Trump, with the need to promote consumer
understanding of coverage options and ensure consumers do not
mistakenly enroll in “Short Term Limied Duration Insurance”
(STLDI) and fixed indemnity expecting benefits coverage as a
substitute for comprehensive coverage. And of course don’t worry
about the prevalence of aggressive and deceptive sales and marketing
practices on television, the internet and elsewhere by all the
rapacious minions of the health insurance industry. A big “hello”
from Broadway Joe Namath!
In service to the health insurance industry, junk plans
always  prioritize profit over people. While they may deliver some
small, short-sighted, fleeting economic benefits, the long-term costs
—to individuals, families, communities— are far greater because
lifesaving health care services are threatened for those who need them
the most.

In 2018, The U.S. House of Representatives Committee on Energy and
Commerce, Subcommittee on Health, and Subcommittee on Oversight and
Investigations, concluded that the GOP/Trump “Short Term Limited
Duration Insurance” (STLDI) plans present a significant threat to
the health and financial well-being of American families. “Short
Term Limited Insurance (STLDI) plans include limited protection for
both catastrophic medical costs and routine medical care;  it is
unclear what kind of value consumers are getting for their premium
dollars, other than a false sense of security. The Committee staff
recommended that federal legislation subject STLDI plans to the all of
the ACA’s interlocking consumer protections, including guaranteed
issue and renewability, the ban on pre-existing condition exclusions,
coverage of the essential health benefits, the medical loss ratio, and
the prohibition on rescissions. Subjecting STLDI plans to all of the
ACA’s consumer protections at a federal level will ensure adequate
protection for consumers.
Building on other efforts to further sabotage and undermine quality
health care insurance for all, President Donald Trump and the GOP had
previously  proposed very similar  “association health insurance
plans” that let small businesses band together and insure themselves
or buy insurance as a group. Association health plans have a bad
track record over the past 10 years, with dozens of court cases and
enforcement actions by federal and state officials. Many turned into
criminal cases involving fraud, embezzlement, diversion of premiums
and mismanagement, leaving employers and employees with millions of
dollars in unpaid medical bills.

Just like the latest proposed “STLDI” plans, Trump’s previous
association health plans were not required to provide essential health
benefits like mental health, substance abuse treatment and drug
coverage, and claim they are  exempt from all state insurance laws
under Trump’s executive order. When toxic plans like this are
approved, it’s clear that our health-insurance system is broken.
Like a cracked pipe, money gushes into our health-care system but
steadily leaks out. Money is siphoned into the advertising budgets of
private-profit insurance companies and the army of corporate
bureaucrats working to deny claims. Even more dollars are soaked up
by the pockets of insurance CEOs who have collectively earned $9.8
billion since the Affordable Care Act was passed in 2010. Nearly a
third of all of our health-care dollars go to something other than
health care.

Another example is the deceptive appeal of Trump’s profitable
“copper catastrophic” plans. They are stunningly inadequate plans
that have very low premiums because their actuarial value is only a
pathetic 50 percent, giving the illusion of health insurance
coverage. They cover an average of about half of health-care costs.
In 2017, the deductible for these plans was $7,150. These plans will
work great if you never get sick or have an accident.

Offering only deteriorating financial protection, especially those
with larger deductibles, this downward trend can produce severe
adverse consequences for the physical, mental and financial health of
the insured. Because of the spartan nature of the newly proposed STLDI
catastrophic plans, the adverse consequences can be anticipated to be
even more severe.

The House of Representatives Committee on Energy and Commerce
concluded that Trump/GOP plans are simply a very bad deal for
consumers. They list six concerns about the Trump Administration’s
policy of expanding these dangerous, unregulated plans that presents a
threat to the health and financial well-being of American families,
particularly in light of the current COVID-19  public health
emergency:
_SIX REASONS TRUMP’S ‘STLDI” POLICY IS DANGEROUS:_
1).  Short Term Limited Duration Insurance (STLDI) plans
systematically discriminate against individuals with pre-existing
conditions, and against women.
2).  These plans offer bare bones coverage, including major coverage
limitations that are not always clear in marketing materials, making
it difficult for consumers to know what they are buying.
3).  STLDI plans offer wholly inadequate protection against
catastrophic medical costs.
4).  Some STLDI plans impose draconian coverage limitations even for
illnesses, injuries, and conditions arising after a consumer purchases
a policy.
5).  On average, less than half of the premium dollars collected from
consumers are spent on medical care.
6).  STLDI plans engage in heavy-handed back end tactics to avoid
paying medical claims that do arise.

 
The GOP/Trump latest absurd plan shows once again the fallacy that we
can take beneficial policies and detrimental policies and combine them
into a reasonable compromise. Good policy for big insurance companies
means bad policies for hapless patients and families. What’s good
for the shark is bad for the minnow!
Bad policies cannot be neutralized by political accommodations. Under
a well-designed, improved  Medicare for All national insurance
program, catastrophic plans like these would not exist. The sooner we
get to single-payer health insurance program, Medicare for All, the
better it will be for all of us — meanwhile, caveat emptor, buyer
beware!
 
_TAKE ACTION NOW:_
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1).  CONTACT YOUR LEGISLATORS asking them to oppose and end Trump’s
STLDI plans immediately.
 2). Most importantly, ask them to strongly support new legislation
now filed in Congress, “The Medicare for All Act of 2025” 
 3). SPECIAL NOTE ON M4A ACT-2025:   
        a). The Medicare for All Act of 2025, now filed in
Congress, would provide health coverage to every U.S.
resident—including comprehensive medical, dental, vision, mental
health, and reproductive care—with no out-of-pocket costs, copays,
or deductibles.
        b).  By eliminating waste and corporate profiteering in
health care, the bill would save hundreds of billions annually that
could be invested in actual health care, resulting in better, more
equitable health outcomes. 
        c). By covering everyone without the copays, deductibles,
and insurance networks that deter care and drive medical debt, M4A
would achieve universal and comprehensive coverage, while assuring
real choice of physician, mental health / health professional and
hospital. 
        d). By eliminating profiteering and wasteful insurance
bureaucracy (plus the administrative costs that bureaucracy inflicts
on healthcare providers), it would — according to the Congressional
Budget Office — free up $400 billion annually in funds that could
pay for the cost of such coverage expansions and improvements. 
        e). Medicare-for-All could also effect a much needed shift
in the ownership of care away from increasingly dominant private
corporations to public ownership by Americans and their communities.
 
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F. Douglas Stephenson
[[link removed]] , LCSW, is a
retired psychotherapist and former instructor of social work in the
University of Florida Department of Psychiatry. He is a member of
Physicians for a National Health Program. [[link removed]]

* US Health Care; Short Term Limited Duration Insurance;
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