If you’ve ever needed health coverage in a pinch — but shied away from short-term health insurance plans because they didn’t last long enough — you might want to take another look at your options.
As of October 2, 2018, the Department of Health and Human Services now allows short-term plans to last up to 364 days in many states, with the option to renew those plans for up to three years total. Here’s what you need to know.
What’s Behind the Change?
The change is a result of an executive order signed in October 2017 that mandated the expansion of short-term policies, health reimbursement models and association health plans. The executive order noted that the change was put in place to expand health care choice for Americans beyond the parameters of the Affordable Care Act (ACA).
These new guidelines are a departure from the 30- to 180-day limits that have been in place until now, and the change could cause a massive shift from traditional plans to short-term policies. If you’re considering changing plans, you’re not alone — some experts estimate that 500,000 people will make that switch in 2019.
What Does This Change Mean for You?
The new rules mean more options — not the least of which is the option to get more mileage out of short-term plans. Even before the extensions, those short-term plans were a good option for several common scenarios, for example:
- If you needed immediate coverage outside of enrollment periods. You can enroll in short-term plans at any time during the year, so you don’t have to worry about keeping track of open enrollment.
- If you couldn’t afford the premiums of year-round plans. Short-term plans are generally cheaper than traditional plans because they aren’t as comprehensive.
But now that Americans can take advantage of those plans for 364 days, you’ll get those same benefits for up to a year — or, with consecutive renewals, even longer.
Is a Short-Term Plan Right for You?
If all this sounds exciting, it should. Keep in mind that short-term plans don’t always have the pre-existing condition and preventive care coverage protections that ACA-compliant plans do, but they may be the perfect option for some of the following groups:
- Young and healthy people who don’t foresee the need for preexisting condition coverage or other special coverages, such as maternity care.
- People who want an inexpensive plan or need cheaper health care coverage than what is offered by traditional health plans.
- People who need off-season enrollment, for example those who find themselves between jobs or otherwise without health insurance and need immediate coverage but don’t qualify for a special enrollment period.
State regulations may also factor in, since some states have their own restrictions on short-term health insurance plans. Check out this list to see if yours is one of them. Unlike ACA plans, short-term insurance also requires medical underwriting, which determines whether you can be covered and if so, what your premiums and coverage exclusions will be. Renewal is not guaranteed when the term is up.
Ensuring that you have insurance makes all the difference when life throws you curveballs. For any plan decision, make sure to carefully balance the details (and read the fine print) to find the right coverage mix for you.