COMPETE Act Aims to Expand Short-Term Health Insurance Options in U.S.

U.S. Senators Ted Cruz and Ted Budd have introduced the COMPETE Act to amend the Public Health Service Act, aiming to extend the maximum duration of short-term, limited-duration insurance (STLDI) plans and include a renewal guarantee for consumers. This legislative move targets enhancing market competition, transparency, and affordability in health insurance, especially for individuals seeking flexible and lower-cost coverage options. STLDI plans were initially designed to bridge coverage gaps during transitions between health plans and have been a topic of policy adjustment since 2018 when the Trump administration extended their allowed coverage period to provide relief from rising premiums in the individual market. The bill reflects a response to the significant increase in premiums under the Affordable Care Act (ACA), with benchmark plan costs rising 129 percent since 2014, outpacing employer-sponsored insurance and general consumer price inflation. Advocates highlight that STLDI plans offer consumers more freedom to choose insurance coverage that fits their specific needs without paying for additional benefits they do not require. This aspect of flexibility may provide a practical alternative for many Americans facing high healthcare costs. Supporters of the COMPETE Act argue that STLDI plans make healthcare more affordable because they are priced substantially lower, approximately 54% less than comparable ACA-compliant plans according to analysis by the Kaiser Family Foundation. Furthermore, these plans facilitate faster enrollment and coverage initiation, bypassing the restrictions of standard enrollment periods and qualifying life events typical in ACA plans. The legislation is also backed by several advocacy groups including Americans for Prosperity, the Foundation for Government Accountability, and Heritage Action, which all emphasize the potential for STLDI plans to increase consumer choice and foster competitive market dynamics. Proponents assert that reinstating wider access to STLDI plans could address the needs of uninsured or underinsured populations by broadening affordable coverage options. Overall, the COMPETE Act represents a notable development in U.S. health insurance policy aimed at increasing flexibility, competition, and cost-effectiveness of short-term insurance plans. It underscores ongoing efforts to balance regulatory frameworks with market-driven solutions to let consumers tailor coverage to their budget and health needs while keeping an eye on controlling premium inflation in the individual insurance marketplace.