On August 1, 2018 the Trump administration issued a final rule to expand the duration limit on Short-Term Health Plans. The current legislation limited short-term insurance to no more than three months. Under the new regulations, short-term insurance limits have been extended to 364 days, in addition to insurers being allowed, but not required, to extend their policies to a maximum of 36 months (Three Years). The final rule is effective October 2, 2018.
It is estimated that premiums for those that wish to purchase short-term policies in lieu of traditional medical plans sold on the Marketplace under the Affordable Care Act (ACA) could save policy holders, roughly $280.00 a month. Health insurance premiums on the Marketplace have steadily increased since 2016 with large double digit increase rate hikes for both 2017 and 2018, making it difficult for individuals to sustain "Affordable" health care without sacrificing plan coverage. Now that ACA's Individual Mandate has been set to zero, starting January 1, 2019, short-term insurance plans could see a migration of the current individual market share flood through.
9 Things To Consider Before Buying Short-Term Insurance
States are considering or have enacted legislation to restrict the sale of short-term plans such as:
California under a bill that's slated for January 1, 2019
Hawaii legislation passed in July 2018
Maryland and the Maryland Health Care Access Act of 2018
Vermont regulations
Illinois House Bill 2624
Washington - currently working on a draft regulation
Short-Term Health Insurance plans can be for more affordable than an ACA plan, especially now in 2019 there is no Individual Shared Responsibility penalty amount.
Short-Term Health Insurance is flexible. For example, if you are a single male that buys a traditional medical plan on the Marketplace it comes with coverage never used, such as maternity coverage.
Short-Term Health Insurance has no Annual Open Enrollment Period.
They attract key groups, such as millennials, due to the low cost.
Short-Term Health Insurance plans were designed to be transitional coverage, not a permanent type of insurance.
They won't accept you if you have a pre-existing condition, of if they do, they won't cover the condition.
They don't cover all the benefits currently received under ACA plans, such as:
Maternity Care
Preventive Services
Prescription Drugs (though some offer discount plans)
Out of Pocket costs could be high if dealing with a Major Medical Condition
Many ACA supporters oppose the final rule with discussion about litigation to challenge the regulation in federal court. ACA supporters are looking to pursue state-by-state efforts, as mentioned above, to enact limitations on short-term health insurance plans or to prohibit the plans altogether.
Whether your an opponent or proponent of the new ruling, AJM Associates stands ready to help assist you with understanding ALL your available options and will continue to keep you apprised as more new develops.