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Short Term Health Plans’ 90-Day Limit to be Removed — 364-Day STM Plans Coming Soon

Short Term Health Plans’ 90-Day Limit to be Removed — 364-Day STM Plans Coming Soon

Posted Apr 03, 2018 by Jenifer Dorsey

You may soon have another option when it comes to long-term Obamacare alternatives. On Tuesday, Feb. 20, the Trump Administration issued a proposal to increase  the duration limits on short-term medical (STM) plans.

The proposal would reverse changes made to STM plans by the Obama administration, which limited short-term policies to a maximum duration of up to three months.

There’s a lot of talk about the Affordable Care Act (ACA) these days—repeal and replace proposals, rule-changing legislation, executive orders. It can be hard to make sense of it all.

Below, we’ve highlighted 6 things to know about the recent STM news, including how the proposed changes could result in lower premium payments for you.

6 Ways the STM Change Could Impact You

1. You’ll have an affordable Obamacare alternative

While STM plans are not considered minimum essential coverage, they do provide another healthcare benefits option for those who are exempt from the individual mandate or choose to pay the tax penalty.

A short term health plan typically costs less than major medical, and the benefits help pay for unexpected medical care resulting from accidents and illnesses. Because they usually exclude preexisting 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
  • 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 cover certain pre-existing conditions
  • May or may not require you to use network providers
  • Are accepted by most healthcare providers

2. You’ll be able to get an STM plan that lasts up to a year

Prior to 2016, short-term health plans were available for as long as 364 days (depending on state laws). If finalized, the proposed rule reversal would lift the 90-day limit and, as explained by HHS, revert “to the previous definition of short-term, limited-duration insurance which permits coverage for nearly a full 12 months.”[1]

3. Cut your health insurance premium in half 

Generally speaking, short-term plan premiums cost a fraction of major medical (i.e., Obamacare plan) premiums. For example, at the end of 2016, a short-term policy cost approximately $124 a month compared with $393 a month for an unsubsidized major medical plan.[2]

The Departments of Labor and Health and Human Services (HHS) issued the proposed rule, citing a lack of consumer options and the rising cost of insurance as the reason for lifting STM policy limitations.[3]

“Americans need more choices in health insurance so they can find coverage that meets their needs,” said Health and Human Services Secretary Alex Azar. “The status quo is failing too many Americans who face skyrocketing costs and fewer and fewer choices. The Trump Administration is taking action so individuals and families have access to quality, affordable healthcare that works for them.”

4. Watch out! You could still owe an Obamacare penalty (for now)

The ACA’s individual mandate requiring most people to have health insurance remains in effect. If you are not exempt and have short-term medical instead of minimum essential coverage, you could still owe a tax penalty. In 2019, the tax penalty will be repealed.

5. You can’t buy these extended short-term health plans yet

The proposed rule issued on Feb. 20, 2017, is not yet final. There is a 60-day comment period in place before the rule can take effect.

6. Short-term plans are available today (and effective as soon as tomorrow)!

You don’t have to wait to buy STM. You can enroll in just a few minutes, right now.

Next-day coverage is available, and policies currently available last from 30 days to 3 months. You may be able to apply for a new policy after 3 months, depending on state laws where you live.

If you need a health plan to cover an unexpected accident or illness, you can get an STM quote in seconds.


Originally posted March 2, 2018

Legal Disclaimers

[1] Ibid.

[2] Centers for Medicare & Medicaid Services. “Fact Sheet: Short-Term, Limited-Duration Insurance Proposed Rule.” Feb. 20, 2018. https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2018-Fact-sheets-items/2018-02-20.html

[3] U.S. Department of Health and Human Services. “Trump Administration Works to Give Relief to Americans Facing High Premiums, Fewer Choices [Press Release].” Feb. 20, 2018. https://www.hhs.gov/about/news/2018/02/20/trump-administration-works-give-relief-americans-facing-high-premiums-fewer-choices.html