Trump Administration Expands 'Junk Insurance' Short-Term Plans to Undermine ACA

The Trump administration finalized regulations expanding short-term, limited-duration health insurance plans from a maximum 3-month term (set by Obama in 2016) to 364 days with renewability up to 3 years total. These plans—derided by critics as ‘junk insurance’ and ’the Trump University equivalent of health insurance’—can sidestep all ACA consumer protections: they may exclude the 10 essential health benefits (maternity care, mental health services, prescription drugs), charge higher prices based on medical conditions, refuse coverage for pre-existing conditions, and deny claims for undisclosed health history. The plans specifically target healthy individuals with cheaper premiums, siphoning them from ACA-compliant markets and leaving sicker, more expensive patients in the risk pool, necessitating premium increases for comprehensive coverage. The health insurance industry (America’s Health Insurance Plans), hospital associations (American Hospital Association), physician groups (American Medical Association), and patient advocacy organizations submitted overwhelming opposition, warning consumers would be ‘stranded when they need care’ and the plans would ‘deceive consumers’ with coverage gaps. Industry groups noted individuals ‘diagnosed with chronic or acute conditions may find themselves seriously uninsured’ when plans exclude critical services. Making it easier to buy plans avoiding ACA protections was central to Trump’s strategy of using executive authority to undercut the ACA after legislative repeal failed. The Biden administration reversed these rules in 2024, limiting short-term plans to 4 months, but the second Trump administration is expected to reinstate the expanded duration in 2025.