This month, President Joe Biden announced a long-anticipated proposal to curtail short-term, limited-duration health plans, effectively robbing millions of people of their current insurance coverage. The president called such plans “a scam” that “has to end.”

The president failed to mention that short-term health plans have provided people with affordable alternatives to Obamacare ’s high-premium, high-deductible offerings. Thus, it’s not surprising that roughly 3 million people have signed up for short-term plans since 2018, and why 78 % of Americans support their availability.

Average monthly premiums for the most basic Obamacare plan cost about $1,000 . While generous government subsidies mask the true price tag of those plans for most customers, people who don’t qualify for subsidies are left desperate for an alternative option.

That’s where short-term insurance plans come in. These plans save consumers who just need basic coverage an average of 50% to 80 % in monthly insurance payments. That’s a game-changer, especially for younger people who, due to a variety of reasons — student loans, soaring rent prices, and credit card debt — need all the financial flexibility they can get.

Under Biden’s proposal, these health plans would be slashed from three-year maximum terms to a mere three or four months. Even worse, families who see their coverage expire in the middle of the year will not be eligible to join a publicly available Obamacare plan until the next open enrollment period. The nonpartisan Congressional Budget Office found that eliminating short-term health insurance would swell the number of people without health coverage. As many as "500,000 [people] would become uninsured” each year, according to CBO estimates.

Biden says this decision is about protecting consumers from an inferior form of coverage, but it’s really about appeasing insurers who want more young and healthy customers to sign up for Obamacare plans to balance their risk pools. If that means that millions of American families will have to take on higher premiums, larger deductibles, and narrower provider networks, so be it.

But the theory that forcing short-term plan holders into Obamacare plans will lower premiums on the Affordable Care Act exchanges has not been the reality in states that already severely limit the availability of short-term plans. In a comprehensive analysis released in 2021, healthcare researcher Brian Blase found that states with the broadest access to short-term insurance saw higher enrollment in healthcare coverage overall while benefiting from larger reductions in insurance premiums. The increased competition fostered by the availability of short-term coverage may have helped to strengthen the offerings from insurance companies participating in the ACA marketplace.

“States that permit short-term plans have lost fewer enrollees in the [ACA] individual market, have had far more insurers offer coverage in the market, and have had larger premium reductions since the 2018 rule took effect,” the report says. “The only states where individual market premiums have increased since 2018 are the five states that effectively prohibit short-term plans.”

Biden’s regulatory crackdown will not benefit consumers. It is a handout to insurance companies, delivering them a larger base of customers who must now accept their high-deductible, high-premium plans while shielding themselves from competition. The evidence suggests that that is exactly what can be expected at the federal level. States that fully permitted short-term availability saw monthly premiums in Obamacare plans fall 6% to 8% across the bronze, silver, and gold tiers — about triple the declines experienced in states that restricted short-term insurance.

Biden campaigned on the familiar talking point that “If you like your health insurance plan, you can keep it,” which earned his former boss Politifact’s “Lie of the Year” in 2013. He resurrected that talking point to rebut the Medicare for All policies trumpeted by his chief rival, Sen. Bernie Sanders (I-VT) — “I give people the option,” he said. As he gears up for reelection, Biden appears to be testing out a new healthcare refrain: “If I like your insurance plan, you can keep it.”

Dean Clancy is a senior health policy fellow at Americans for Prosperity.