Why Short Term Medical Insurance Plans Can Now Be Longer Than Three Months
For several decades, Short Term Medical Insurance has been one of many options for consumers.
Short Term Medical Insurance was ideal for those who were without insurance and needed a temporary solution, with plans ranging from one month to just under twelve months.
In 2016, the Federal Government created a rule limiting the length of Short Term Medical Insurance plans to less than three month.
The rule, Regulation CMS-9932-F, became effective on April 1, 2017.
Although the change restricted the duration of Short Term Medical Insurance plans, many consumers chose to maintain their coverage by reapplying for a new plan every three months.
While this strategy was not ideal, it did help consumers who otherwise would have chosen to go without insurance altogether.
In October of 2017, President Trump signed an executive order, “Presidential Executive Order Promoting Healthcare Choice and Competition Across the United States,” that among other things, required the department of Health and Human Services to create a plan that would bring back longer coverage terms for Short Term Medical Insurance plans.
This was followed by a new regulation, released on August 1, 2018, and effective October 2, 2018.
Short Term Medical Insurance plans can now have durations up to 364 days..Many states have adopted the regulation wholesale, so consumers in states like Florida, Mississippi and Texas, have access to Short Term Medical Insurance plans of up to a year.
Other states have taken a more conservative approach, extending the term to six-months.
A handful of states will maintain the three month rule.
Some, like California, are introducing legislation to outright ban them.
No matter the state of residence, beginning in January 2019, consumers will no longer be subject to the Affordable Care Act Shared Responsibility Tax, which means consumers will not only have access to more healthcare options, they will also have more savings options.