Short-term health plans offer medical coverage for a specific period of time, usually in exchange for a premium (what you pay per month for having coverage) that is much lower than traditional plans.
These plans are available in most states and offer a solution for healthy individuals and families who don’t want to spend much money on premiums (what you pay per month for having coverage).
However, in 2019, for varying reasons, they are not available in nine states: California, Colorado, New York, New Jersey, Hawaii, Rhode Island, Massachusetts, Vermont, and Washington.
This is because in some states, like California, for example, they are prohibited by law, and in others, the regulations they are subject to are so strict that insurance companies have decided not to offer them.
In all other states, these plans are available, but vary widely in availability and duration.
These plans are not related to those available on the insurance marketplaces established by the Patient Protection and Affordable Care Act (ACA, also known as Obamacare).
Short-term health insurance generally offers more simplified benefits packages, which include services a healthy person would need in the event of an illness or accident, including coverage for doctor’s visits, hospitalizations, x-rays, and other treatments.
You can purchase short-term health plans at any time, meaning that it’s not necessary to wait for an open enrollment period to sign up.
A healthy family can purchase a short-term health plan that will become effective the day after it is purchased.
All individuals living in the United States can purchase one, regardless of their immigration status. This is the biggest difference between these plans and Obamacare.
State by State
The availability of short-term health care plans has always varied from state to state. However, the general rule prior to the Trump administration was that “short-term” meant less than a year. Some lasted for three or six months, or 364 days.
The Trump administration enacted new regulations to loosen restrictions on short-term plans. Since October of 2018, federal regulations allow the initial period for short-term plans to last for up to 364 days, and can be renewed for up to 36 months.
States can adhere to these regulations or apply their own.
In summary, the new norms state that:
- Short-term health plans can be issued for an initial term of 364 days.
- They can be renewed, but not for a total of more than 36 months.
- Consumers must be aware that these plans are not subject to the same rules as those offered on the insurance marketplaces established under the Affordable Care Act (ACA, also known as Obamacare) and that upon their expiration, you are not eligible for the special enrollment period for ACA plans.