Response to White House announcement regarding several actions aimed at lowering health care costs - 

FACT SHEET: President Biden Announces New Actions to Lower Health Care Costs and Protect Consumers from Scam Insurance Plans and Junk Fees as Part of “Bidenomics” Push

Provided by Richard N. Pagnotta, Esq.:

Posted on July 7, 2023, the White House announced initiatives to protect the “little guy” – the patient, from abusive consumer pricing and scam insurance plans/junk fees. The administration is concerned that many patients are taking out third-party medical credit cards and medical loans to pay off their hospital bills. When the bills are not paid the patients are taken to collections or they file for bankruptcy, and the government is trying to prevent that.
The concern here is that hospitals are pushing these credit cards and loans due to the incentives the companies offer the hospital. These third-party credit cards are a rapidly growing business and do more harm than good for the patient. Typically, if a patient  has a past due balance of less than $500 and for under a year, the credit companies will not report it. This changes when patients use these third-party credit cards. The debt is then listed as a credit card debt and the patients credit is damaged.
The Administration is also concerned that patients feel forced into signing up for these third-party credit cards or loans. The thought is that patients rely on their doctors for accurate healthcare and they are seen as knowledgeable people so when doctors, assistants, or anyone else in the hospital offers these payment options, the patient trusts them and agrees to sign up. They sign up without fully knowing what they are agreeing to, are desperate and need the care, and/or feel pressured sitting with the doctor in his office and want to make a quick decision.
As of right now there has been no bill proposed to address the above concerns;  the Administration initiative is strictly a Request for Information, including by framing questions from Consumer Financial Protection Bureau, and Department of Health and Human Services of to gather data on these loans and credit cards. Once enough data has been obtained it is possible that regulations may be implemented to decrease the amount of third-party credit cards and loans offered or more safeguards could be put in place to protect the consumer.
It also appears that the Administration is seeking to close the loopholes created by the prior administration in regards to “junk insurance”. These “junk insurance” plans would limit coverage due to patients’ pre-existing conditions and the patients’ were not aware and would then be hit with a huge bill they were unable to pay. The only current rule states the following:
“Short-term” plans must be truly short-term.  Under the new rules, if finalized, plans that claim to be “short-term” health insurance would be limited to just 3 months, or a maximum of 4 months, if extended – instead of the 3 years that junk plans can offer today as a result of changes made by the previous administration.  Id. 

We will continue to monitor these initiatives and provide updates, when available.  Regulatory questions?  Contact Jennifer or Richard