Washington, D.C. — U.S. Senators Ted Budd (R-N.C.) and Ted Cruz (R-Texas) introduced the Competition and Openness in Markets to Promote Efficiency, Transparency, and Enhanced Affordability (COMPETE) Act today. The bill would amend the Public Health Service Act to extend the maximum duration of short-term, limited-duration insurance (STLDI), and includes a renewal guarantee provision that allows consumers to purchase STLDI plans for an extended period of time.
“Americans overwhelmingly agree that we need access to high-quality healthcare at a reasonable price. Healthcare costs have climbed to unsustainable rates because of bad policies, like Obamacare, that have propped up insurance companies at the cost of eliminating consumer choice. I am proud to be working with Senator Cruz to provide a common-sense solution for short-term health plans by enhancing access to lower premiums and transparently making healthcare more affordable and flexible for individuals and their families,” said Senator Budd.
“Obamacare reduced health insurance options and caused premiums to skyrocket. This legislation will promote more competition, provide consumers with more choices, and allow Americans to choose the healthcare coverage that fits their needs and budgets. I urge my colleagues to pass this legislation expeditiously,” said Senator Cruz.
The COMPETE Act is endorsed by Americans for Prosperity, Foundation for Government Accountability, and Heritage Action.
“The Biden administration stripped away affordable short-term plans that gave families real health coverage at a fraction of the cost. Senator Cruz’s bill restores the freedom President Trump gave Americans to choose plans that actually work for them, not force them into ObamaCare’s one-size-fits-all mess. Instead of continuing to prop up a failing government system with heavy subsidies, this bill unleashes free markets and real competition to give families better, cheaper coverage options,” said Tarren Bragdon, President and CEO, Foundation for Government Accountability.
Read the full bill text HERE.
BACKGROUND
Since the law took effect in 2014, premiums for Affordable Care Act (ACA) benchmark plans increased 129 percent for a typical 50-year-old enrollee—nearly double the rate of employer-sponsored insurance (68 percent) and more than three times the increase in the consumer price index (39 percent).
As a result, in 2018, President Trump issued a rule to allow STLDI to cover longer time periods to shield consumers in the individual market from soaring premiums and restricted care options.
In 2024, the Biden administration imposed limits on the use of STLDI plans, effectively rolling back the 2018 regulation that expanded the duration of such plans during the first Trump administration.
STLDI is a type of health insurance coverage that was primarily designed to fill gaps in coverage that may occur when an individual is transitioning from one plan or coverage to another plan or coverage.
Short Term Limited Duration Insurance
- Promotes Greater Freedom:
- Individuals are free to select the optimal amount of health coverage for their needs without being coerced into paying for additional coverage they’d never use.
- Makes Healthcare More Affordable:
- According to the Kaiser Family Foundation (KFF), following the Trump administration’s expansion of short-term plans in 2018, these policies were priced at approximately 54% less than comparable ACA-compliant plans.
- Helps Uninsured:
- STLDI plans can provide affordable, flexible coverage that expands access to insurance. STLDI gives individuals a realistic path to coverage at a smaller cost—helping ensure that more people are protected from soaring healthcare costs.
- Faster Coverage:
- Unlike most individual market plans, which limit enrollment to specific periods or qualifying life events, short-term plans can be purchased at any time. Coverage typically begins within just a few days, compared to the several weeks it may take for other health plans to start.
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