On Aug. 1, 2018, the Departments of Health and Human Services, Labor and the Treasury issued a final rule lifting Obama-era limits on short-term health insurance plans.[0]
The final rule was effective and applicable 60 days after publication in the Federal Registrar, which means as of October 2018 short term policies:
- May have an initial policy duration of less than 12 months (instead of 90 days)
- Are renewable for a combined maximum duration of 36 months total coverage.[1]
Please note that some states have their own term limits, and short term policies are not available in all states.
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The final rule also requires all short term policies to include a notice explaining the policy they are purchasing.[2]
In a press release, Health and Human Services Secretary Alex Azar said:
Under the Affordable Care Act, Americans have seen insurance premiums rise and choices dwindle.
President Trump is bringing more affordable insurance options back to the market, including through allowing the renewal of short term plans. These plans aren’t for everyone, but they can provide a much more affordable option for millions of the forgotten men and women left out by the current system.[3]
4 ways the short term medical change could impact you
Below, we’ve highlighted four things to know about the short term medical (STM) news, including how these changes could result in lower premium payments for you.
1. You’ll have an affordable health insurance alternative
Short term health insurance can be a lower-cost option than major medical because they include limited benefits and do not fulfill ACA requirements; for example, they do not cover preventive care or other essential health benefits.
Short term policies include benefits that help pay for unexpected medical care resulting from accidents and illnesses. Because they usually exclude pre-existing conditions, they tend to be an option for healthy individuals who want some financial protection from high claims.
Short term plans:
- Can be quickly obtained year-round if you qualify
- Cover a range of healthcare services, including emergency room treatment, hospital room and board, doctor office visits and more
- Come in many plan designs to fit your budget and healthcare needs
- May or may not require you to use network providers
- Are accepted by most healthcare providers
2. You may be able to get an STM plan that lasts up to 364 days
Prior to 2016, short term health plans were available for as long as 364 days (depending on state laws). The final rule lifts the current 90-day limit in some states and, as explained by HHS, reverts “to the previous definition of short term, limited-duration insurance which permits coverage for nearly a full 12 months.”[4]
Find out what the duration limits are in your state.
3. You may be able to reduce your health insurance premium
As mentioned above, short term plan premiums may be lower than major medical (i.e., Obamacare plan) premiums because they have limited coverage. As CMS pointed out in a press release announcing the final rule:[5]
The average monthly premium for an individual in the fourth quarter of 2016 for a short term, limited-duration policy was approximately $124, compared with $393 for an unsubsidized individual market plan.
The Departments of Labor and Health and Human Services (HHS) issued the proposed rule in February 2018, citing a lack of consumer options and the rising cost of insurance as the reason for lifting STM policy limitations.[6]
4. Short term plans are available today (depending on your state)
You don’t have to wait to buy short term health insurance. You can obtain quotes in just a few minutes, right now. The application is subject to acceptance by the carrier.
Find out how long you can have a short term medical policy in your state.
If you need a health plan to cover an unexpected accident or illness, you can get a short term medical insurance quote in seconds.
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Read the full CMS Fact Sheet: Short Term, Limited-Duration Insurance Final Rule.
More on Short Term Health Plans
What is short term health insurance and what does it cover?
Why buy short term health insurance and is it right for you?
How to find the best short term health insurance plan for you
Is short term health insurance a good idea? Advantages and disadvantages
