Feds drop push to end fixed indemnity health plans

Federal officials have ended their latest efforts to ban the sale of stand-alone fixed indemnity insurance plans that do not meet the standards of the Affordable Care Act, reports The Wall Street Journal.

The move comes after the U.S. Court of Appeals for the District of Columbia in July struck down President Barack Obama administration's rule on fixed indemnity policies.

Government lawyers told a federal court last month they would accept its decision that they had overstepped by seeking to effectively end so-called fixed indemnity plans, according to the article. Fixed indemnity insurance is typically less comprehensive than the minimum coverage required under the ACA. These plans pay a fixed dollar amount regardless of how much a provider is actually owed.

Some consumer advocates worried the plans are of poor value and mislead customers, while some actuaries have also said the availability of such plans deters healthy people from purchasing higher-priced insurance overhauled by the ACA , reports The Wall Street Journal.

But supporters of the fixed indemnity plans have argued that the Obama administration's rule would eliminate the market for such policies.

Federal officials declined to comment to The Wall Street Journal on their decision to end their drive to ban fixed indemnity insurance.

 

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