Buying a short-term health plan in Washington, DC
- DC has enacted emergency legislation that limits short-term plans to three months and prohibits renewals.
- New legislation also prevents short-term plans from excluding pre-existing conditions or basing eligibility on medical history.
- Permanent legislation to limit short-term plans is under consideration; would take effect after the emergency legislation expires in March.
- At least six insurers offer short-term plans in DC.
For a few months in late 2018, the new federal rules for short-term plans applied in DC
Prior to 2017, the DC Department of Insurance, Securities, and Banking (DISB) posted a memo clarifying that short-term health insurance plans had to last less than 365 days, and were not regulated by the ACA. Starting in 2017, however, federal regulations (enacted by the Obama Administration in 2016) began to limit short-term health plans to no more than three months, and prohibited renewal. But the Trump Administration relaxed those rules, and for several weeks in late 2018, until DC enacted new legislation, the new federal rules applied, allowing insurers to offer longer short-term plans.
In May 2018, when it was clear that the Trump Administration was planning to roll back the Obama-era restrictions on short-term plans, DC’s Standing Advisory Board unanimously recommended that the DC City Council implement rules to limit short-term health insurance plans to three months in duration and prohibit renewals. Without legislative action to limit the duration of short-term plans, an Urban Institute analysis had estimated that the expansion of short-term plans under the new federal rules would reduce the size of DC’s ACA-compliant market by 30.5 percent.
DC has enacted legislation that limits short-term plans to three months and bans renewals
At the October 2018 board meeting for DC’s health insurance exchange, the board noted (at 19:12 in the audio recording of the meeting) that DC City Councilmember Vincent Gray had introduced legislation (Bill 22-1001) that would limit short-term plans to three months and prohibit renewals. The Board noted that they supported the legislation.
Another piece of legislation, Bill B22-1020, was introduced after Gray’s legislation, and included additional provisions beyond those originally called for in Gray’s three-page bill. It’s notable that the text of B22-1020, in addition to limiting short-term plans to three months and prohibiting renewals, also prevents short-term plans from excluding coverage for pre-existing conditions or rejecting applicants based on pre-existing conditions (those provisions have since been added to Bill 22-1001 as well).
Ultimately, B22-1020 was signed into law on December 10. It is an emergency bill, so while it took effect immediately, it will only be in effect for 90 days. But that gives the City Council time to enact B22-1001, which is a permanent version of the same type of restrictions on short-term health insurance. If enacted, it will permanently limit short-term plans to three months, prevent renewals, prevent the sale of a short-term plan to a person whom the insurer had covered with another short-term plan within the previous nine months, and prevent the insurer from excluding any pre-existing conditions for which the applicant sought treatment in the prior 12 months. Such conditions could also not be used by the insurer to reject an application.
In addition to limiting short-term plans, both pieces of legislation also place limits on association health plans sold in DC.
There are several other states that limit short-term plans to three months and prohibit renewals. But the provision in B22-1020 blocking pre-existing condition exclusions could end up making the DC market unattractive for short-term insurers, as has been the case in other states that have similar regulations. But as of December 13, three days after the emergency legislation had been enacted, there were still at least six insurers selling short-term plans in DC, with terms of up to a year.
Short-term health insurance: DC regulations
DISB reviews rate filings for short-term plans, just as they review filings for ACA-compliant major medical plans. In July 2016, the following notice was posted on pending short-term rate filings, indicating that the filings were being rejected for the time being:
“It was decided just late yesterday afternoon that DISB WILL NO LONGER approve any STM policies until such time that the new federal regulation (that has a ` 3- month max. term coverage with no renewal allowed’ provision ) passes sometime next year (hopefully) —– ( see link site —– http://federalregister.gov/a/2016-13583) —– (this newly adopted DISB rule pertains to those STM policies that are sold to the DC general population only —- & excludes those that are sold as Student Policies with specific target market which can also be filed as a `Blanket Student Health Benefit TOI’ coverage type in SERFF ).” The new federal legislation has not been enacted yet.
That proposed federal regulation was finalized in late 2016, and took effect in 2017, limiting short-term plans to no more than three months in duration, nationwide. But those rules were rolled back as of October 2018, under the terms of the Trump Administration’s new rules.
Because DC didn’t have its own rules in place at that point, longer short-term plans were available in the District starting in early October 2018. The emergency legislation took effect December 10, but was not yet being enforced as of a few days later, and longer short-term plans were still being offered for purchase by several insurers.
Which insurers offer short-term plans in DC?
- Companion Life
- Everest Prime
- National General
- Standard Life
Some of these plans were still being offered with terms of up to a year as of mid-December 2018. DC’s emergency legislation to limit short-term plans took effect immediately when it was enacted on December 10, but there’s sometimes a delay in implementation and enforcement for new insurance rules.
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.