Short-term health plans in Alaska
- Alaska defaults to the federal rules for short-term plans.
- Short-term health insurance in Alaska is allowed to have initial terms of up to 364 days, with total duration, including renewals, of up to 36 months.
- Some state insurance regulations do apply to short-term health insurance in Alaska.
- Alaska’s Division of Insurance stresses the need for caution when consumers consider short-term health insurance.
- Two insurers are licensed to offer short-term health insurance in Alaska, but it’s not clear whether either one is actively selling plans.
Alaska’s short-term health insurance regulations
The Alaska Division of Insurance confirmed that while the state does not have benefit mandates for short-term plans or limit the duration or renewability of short-term plans, there are some state-based rules that short-term healthcare plans must follow. These include rules relating to prompt payment of claims as well as the state’s 80th percentile rule for out-of-network providers. Rates and forms for short-term plans must be filed with, and approved by, the Alaska Division of Insurance.
In 2015, Alaska Insurance Commissioner, Lori Wing-Heier, issued a press release about a short-term product that was being fraudulently marketed in the state. The notice included information about the drawbacks of short-term plans.
The Alaska Division of Insurance has since reiterated the need for caution when consumers are considering short-term plans.
Duration of short-term plans in Alaska
Thereare no state-specific regulations pertaining to the duration of short-term health insurance in Alaska, so the state defaults to the federal regulations and the Trump administration’s regulations apply in Alaska. Insurers are allowed to offer short-term plans with initial terms up to 364 days and the option to renew for a total short-term plan duration of up to 36 months.
Until October 2, 2018, federal rules limited short-term health plans to three months, and prohibited renewal. But the Trump administration relaxed those rules.
Alaska Senator Lisa Murkowski expressed cautious support for the new rules. Murkowski noted that although it’s clear that short-term health plans are not as robust as ACA-compliant coverage and have a variety of limitations, thousands of Alaska residents had been priced out of the regular major medical market and that short-term coverage would essentially be better than no insurance coverage at all for those folks.
Which insurers offer short-term plans in Alaska?
As of 2018, there were five insurers that were licensed to sell short-term health insurance in Alaska. But the Alaska Division of Insurance confirmed that just two insurers are approved to sell short-term health insurance as of October 2020:
- Independence American Insurance Company
- Moda Health Plan Inc.
It’s not clear, however, whether either of these insurers is actively marketing short-term health insurance plans in Alaska. Neither company’s website shows short-term plans for sale in Alaska (Anchorage zip code) as of the fall of 2020.
Some national websites dedicated to short-term health insurance only have fixed indemnity plans available for Alaska; note that fixed indemnity plans are very different from short-term health insurance in terms of plan design, although both types of coverage are considered “excepted benefits,” meaning that they’re not regulated by the ACA.
Who can get short-term health insurance in Alaska
Short-term health insurance in Alaska can be purchased by applicants who can meet the underwriting guidelines the insurers use. In general, this means being under 65 years old (some insurers put the age limit at 64 years) and in fairly good health.
Short-term health plans typically include blanket exclusions for pre-existing conditions, so they are not adequate for residents of the Last Frontier who need coverage for ongoing conditions. Short-term plans are not required to cover the essential health benefits, and many of them do not include coverage for maternity care, mental health care, or prescription drugs.
If you’re in need of health insurance coverage in Alaska, first check to see if you’re eligible for a special enrollment period that you could use to enroll in an ACA-compliant major medical plan through the exchange (marketplace) in Alaska. Special enrollment periods are triggered by qualifying life events, but there’s also an annual enrollment window each fall (November 1 – December 15) during which residents can enroll in ACA-compliant individual market coverage. These plans, offered in Alaska by Moda and Premera, are purchased on a month-to-month basis, so you can enroll in ACA-compliant coverage — with a premium subsidy if you’re eligible — even if you only need the plan for a few months until Medicare or an employer’s plan takes effect.
When should I consider short-term health insurance in Alaska?
There are some situations in which short-term health insurance is the most realistic or the only option, including:
- If you missed open enrollment for ACA-compliant coverage and do not have a qualifying event that would trigger a special enrollment period.
- If you’ll soon be enrolled in Medicare and need a temporary plan to cover you in the meantime.
- If you’re newly employed by a business that has a waiting period before healthcare benefits take effect.
- If you’re losing an employer-sponsored plan mid-month, and your new coverage (either through the marketplace or through a new employer) won’t take effect until the first of the following month. Note that COBRA might be available as a fall-back option in this scenario instead, since COBRA coverage is retroactive once you sign up for it.
- If you’re not eligible for Medicaid or a premium subsidy in the exchange for an ACA-compliant plan. For people who don’t receive premium subsidies, the monthly premiums for ACA-compliant coverage are more expensive in Alaska than they are in many other states. This makes affordability a significant factor for people who aren’t eligible for subsidies or for Medicaid under the state’s expanded guidelines.
People who are not eligible for premium subsidies include:
- Those who earn more than 400% of the poverty level. For 2021 coverage in Alaska, that amounts to $63,800 for a single person; note that this is higher than the eligibility cap in the continental United States, due to the higher poverty level threshold in Alaska. If your ACA-specific modified adjusted gross income is just a little above the subsidy-eligible threshold, there are steps you can take to reduce it.
- People who are caught by the ACA’s family glitch.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.