Last month, the Federal Trade Commission (FTC) announced an enforcement action against a junk insurance company to reimburse consumers $100 million after finding the company used deceptive advertising and created barriers to prevent consumers from canceling the policies. This important announcement reveals the continued harms of junk plans, which lack important consumer protections and may masquerade as true coverage. We urge the Biden administration to reduce the availability of junk insurance that puts millions at financial and health risk from lack of coverage and unexpected health care expenses.

Since 2018, short-term limited duration insurance plans (STLDIs) have cluttered the individual health insurance market. These plans often do not include coverage for prescription drugs, mental health, or preexisting conditions and often limit how much they will pay. But consumers can be lured by deceptive marketing and premiums that usually come in below Affordable Care Act (ACA) compliant coverage.

When the Trump administration expanded the availability of STLDIs, Medicare Rights outlined significant concerns, including the potential that such plans would cause problems in the insurance market and lead to people lacking sufficient health coverage. This FTC action demonstrates that our concerns were well founded.

We continue to urge the Biden administration to reverse the expansion of STLDIs, bolster ACA-compliant plans, and protect consumers from the confusion and deceptive marketing that go hand-in-hand with these products.

Read more about the harms of junk plans.

Read our comments in opposition to the expansion of junk plans.

Read our policy recommendations to the Biden administration.