COMPETE Act
- Bill Number
- S. 3418
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 1
- Policy Area
- Health
- Status
- Introduced
- Latest Action
- 2025-12-10: Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
- Last Updated
- 2026-01-08T17:22:57Z
AI-Generated Summary
Purpose of the Legislation
The COMPETE Act (S. 3418) aims to promote competition in health insurance markets by clarifying and expanding the availability of short-term limited duration insurance. This type of insurance offers temporary coverage outside the standard requirements of comprehensive health plans, potentially increasing consumer choices and affordability in the short term.
Key Provisions
- Short Title: The bill is formally titled the "Competition and Openness in Markets to Promote Efficiency, Transparency, and Enhanced Affordability Act" or the "COMPETE Act."
- Definition of Short-Term Limited Duration Insurance: Amends Section 2791(b) of the Public Health Service Act (42 U.S.C. 300gg-91(b)) to define this insurance as a health plan provided by an insurer under a contract that:
- Expires no more than 12 months after the original start date.
- May include a "renewal guarantee," allowing policyholders to buy additional policies later at a set premium, without new health evaluations (underwriting).
Significant Changes to Existing Law
- Prior to this amendment, short-term limited duration insurance was regulated under the Affordable Care Act (ACA) with restrictions on duration (often limited to 3 months, later extended to under 12 months by executive action). This bill codifies a maximum initial duration of 12 months and introduces a formal renewal option without re-underwriting, potentially making these plans more flexible and attractive compared to previous limits.
- The change applies specifically to the Public Health Service Act, which governs health insurance standards, but could influence related federal regulations on temporary coverage.
Potential Impacts
- On Citizens: May provide more accessible, lower-cost temporary health coverage options for individuals between jobs, during life transitions, or ineligible for ACA subsidies, though these plans often lack comprehensive benefits like pre-existing condition protections.
- On Government Agencies: The Department of Health and Human Services (HHS) and state insurance regulators may need to update oversight rules to enforce the new definition, potentially increasing administrative workload for monitoring compliance.
- On International Relations: No direct impacts, as the bill focuses on domestic U.S. health insurance markets.
- Broader Market Effects: Could foster greater competition among insurers by encouraging more short-term plan offerings, possibly lowering premiums in this segment but risking gaps in long-term coverage.
Main Stakeholders Affected
- Health Insurance Issuers: Benefit from clearer rules to offer and renew short-term plans, potentially expanding their product lines.
- Consumers and Policyholders: Gain flexibility in temporary coverage but may face risks if relying on these plans without ACA-mandated protections (e.g., coverage for essential health benefits).
- Healthcare Providers: Indirectly affected through potential shifts in patient coverage types, which could influence reimbursement patterns.
- State and Federal Regulators: Responsible for implementing and enforcing the changes, including ensuring plans meet the defined criteria.
Notable Legal, Constitutional, or Political Implications
- Legal: Strengthens the framework for non-ACA compliant insurance by embedding the definition in federal law, which could preempt varying state regulations on short-term plans and reduce legal challenges over duration limits. However, it may conflict with ACA goals of comprehensive coverage if short-term plans erode enrollment in protected markets.
- Constitutional: No apparent challenges, as it operates within Congress's authority to regulate interstate commerce and health policy under the Commerce Clause.
- Political: Introduced by Senators Ted Cruz and Ted Budd, the bill aligns with efforts to expand market-driven alternatives to ACA mandates, potentially sparking debates on balancing consumer choice with health protections. If enacted, it could influence ongoing discussions about health insurance reform without altering core ACA structures.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (1)
Recent Actions
- 2025-12-10: Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
- 2025-12-10: Introduced in Senate
Bill Versions
- Competition and Openness in Markets to Promote Efficiency, Transparency, and Enhanced affordability Act — issued 2025-12-10 — PDF (2 pages)