New RIGHT Act Allows Short-Term Health Plans to Last Up to Three Years, Raising Consumer Risk

The Removing Insurance Gaps for Health Treatment (RIGHT) Act of 2025 doesn't sound too complicated on the surface, but it makes a major change to how certain health plans operate. Specifically, Section 2 of this bill redefines "short-term limited duration insurance" (STLDI) plans, allowing them to be offered for a total duration of up to three years. This is a significant extension from previous federal rules that often capped these plans at much shorter periods, sometimes just a few months.

The Three-Year Loophole

To understand why this matters, you need to know what an STLDI plan is. Think of it as budget health coverage—it usually comes with lower monthly premiums but skips many of the consumer protections and essential health benefits (like prescription drugs, maternity care, or mental health services) required by comprehensive plans under the Affordable Care Act (ACA). The bill’s new definition states that while the contract itself must expire in less than 12 months, the total duration of coverage can run up to three years. This creates a mechanism for continuous, rolling short-term coverage that sidesteps consumer protections for a much longer period than before.

Who’s Taking the Risk?

This change directly impacts the 25–45 crowd who are often juggling careers, family, and costs. If you’re healthy and just need cheap coverage for a few years while you decide on a career path or start a small business, a low-premium STLDI plan might look tempting. However, these plans are notorious for not covering pre-existing conditions and often have high out-of-pocket costs for serious illnesses. If you enroll in one of these plans and get sick in year two, the insurer can deny coverage upon renewal or refuse to pay for expensive treatments because the plan isn't required to meet the same standards as comprehensive insurance. This is a massive risk for consumers, particularly since the bill extends that risk window from one year to three years.

Impact on the Main Market

Extending the duration of these non-comprehensive plans also has a ripple effect on the broader health insurance market. When healthier, younger individuals opt for these cheaper, less regulated three-year plans, they are pulled out of the ACA-compliant market. This leaves the comprehensive insurance pool with a higher proportion of older or sicker individuals, which can destabilize the risk pool and potentially drive up premiums for everyone else who needs or wants full coverage. This is a classic case where increasing 'options' for some can inadvertently increase costs for others.

The Fine Print Challenge

The bill’s language in Section 2 is tricky, stating the contract must expire in less than 12 months but the total duration can be three years. This setup allows insurers to market these plans aggressively as a long-term solution while maintaining the legal flexibility to drop coverage or raise rates dramatically every year without adhering to guaranteed issue requirements. For the consumer, it means you have to be extremely careful and understand that you are essentially signing up for three years of potential uncertainty, where a major diagnosis could mean being left without adequate coverage.