Buying short-term health plans in Idaho
- 3,769 people had short-term coverage in Idaho in 2016. That’s likely to increase with the state’s new “enhanced” short-term plans.
- Enhanced short-term plans in Idaho can have terms of up to 364 days; nonrenewable short-term plans can have terms up to six months.
- Short-term plans were previously defined in Idaho as being non-renewable, but new legislation signed into law in 2019 allows for enhanced short-term plans (available for 2020) that are renewable and far more robust than traditional short-term plans.
- Idaho wants to make enhanced short-term plans available through the exchange as of early-mid 2020, but federal lawmakers are urging CMS to reject this idea.
- The enhanced short-term plan must abide by numerous state regulations.
- Before the enhanced short-term plans became available, Idaho consumers had previously received cautions from the state about the potential drawbacks of short-term plans.
- At least six insurers offer short-term plans in Idaho.
How many people have short-term coverage in Idaho?
In 2017, the Idaho Department of Insurance published an overview of health coverage in the state. As of 2016, there were 3,769 people with short-term health insurance coverage in Idaho, which was a decrease of 13.3 percent since 2015. But Idaho’s new “enhanced” short-term plans, which are available for 2020, are very different from regular short-term plans. Overall short-term plan enrollment in the states could end up growing significantly as a result.
How long can short-term plans last in Idaho?
Idaho now has two types of short-term plans: Regular non-renewable short-term plans cannot have terms in excess of six months. But “enhanced” short-term plans, which follow a different set of rules, can have terms up to 364 days and are guaranteed renewable for up to 36 months. Idaho’s rules for these plans are extensive, and go well beyond the Trump administration’s regulations that took effect in 2018.
[There is some uncertainty about the implementation of the rules, as there are still some non-enhanced short-term plans currently for sale in Idaho with terms of up to 364 days. The Idaho Department of Insurance webpage about short-term plans still shows the state’s guidance from before the new enhanced short-term plan law was implemented. It indicates that short-term plans in the state can have terms of “less than 12 months” and cannot be renewable. But the Department also has a webpage devoted to the new rulemaking for short-term plans, including regulations that took effect in July 2019 and that differentiate between enhanced and regular short-term plans, with the latter limited to six months in duration. We have requested more information from the Idaho Department of Insurance and will update this page with any additional details we receive.]
Until 2019, Idaho regulations clarified that if plans were renewable, they were subject to Idaho’s rules that apply to Idaho’s individual insurance market, including a requirement that the plans be guaranteed renewable. So short-term plans were defined in Idaho as being non-renewable (see Idaho insurance statutes, Title 41, Chapter 52).
New Idaho law creates more robust, highly regulated, guaranteed renewable short-term plans
In 2018, Idaho tried to get CMS approval for “state-based” plans that would have skirted various ACA requirements and regulations. CMS rejected that proposal. But they indicated that the state could modify the proposal and use short-term plan rules in order to accomplish much of its goals without the need for additional federal approval.
So in April 2019, Idaho enacted legislation (H.275) that allows for the creation of “enhanced” short-term plans. While these plans are still required to have initial terms that are under 12 months, they’re renewable “at the option of the insured.” That’s an important distinction; the federal short-term plans regulations that were finalized in 2018 allow short-term plans to be renewable, but at the discretion of the insurer. Idaho’s new legislation requires insurers that offer “enhanced” short-term plans to let members renew their coverage.
In keeping with federal regulations, total plan duration, including renewals, cannot exceed 36 months. But H.275 also indicates that the insurer will have to allow a member to reapply for another policy after one policy ends and its renewal opportunities have been exhausted [see 41-5207(h)]. And the regulations the state has issued go even further, noting that “enhanced short-term plans must be reissued at the option of the enrollee, upon exhausting any renewability due to duration or age,” and that “no new application or questions concerning the health or medical condition of the covered individuals may be requested to effectuate the reissuance.” (emphasis added)
H.275 called for the addition of Section 5214 to Idaho Code Title 41, Chapter 52, which had been added by mid-2019. The legislation stated that the new rules would be effective immediately, and an April 2019 bulletin published by the Idaho Department of Insurance noted that short-term plans with “limited renewability” were likely to be available in Idaho by 2020.
Blue Cross of Idaho began selling enhanced short-term plans as of December 1, 2019, and SelectHealth has filed paperwork with the state to also begin offering the plans (SERFF filing number SLCT-132118836 is for coverage that could be effective as soon as January 2020. As of early December, the filing is pending regulatory approval).
Idaho wants to make enhanced short-term coverage available via the exchange in 2020
Draft meeting minutes from a September 2019 board meeting for Your Health Idaho (the state-run health insurance exchange) indicate that these enhanced short-term plans are expected to be offered for sale via the exchange as soon as the second quarter of 2020. The meeting minutes note that the exchange will have to sort out how the medical history questionnaires would be handled for those plans, as their pricing can vary based on medical history (unlike ACA-compliant plans).
Allowing enhanced short-term plans to be sold through the exchange would obviously be controversial. The ACA only allows qualified health plans to be sold through a state’s exchange, and these enhanced short-term plans — while certainly better than short-term plans in most states — are not qualified health plans.
Premium subsidies would not be available to offset the cost of the enhanced short-term plans in the exchange, but the idea is that they would be a lower-cost option for people who would otherwise be uninsured or covered under lower quality short-term plans, health care sharing ministry plans, fixed indemnity plans, etc.
The exchange board noted that the assumption is that although there would likely be some current Your Health Idaho enrollees with incomes above 400 percent of the poverty level (who don’t qualify for premium subsidies) who would switch to the enhanced short-term plans, most of the enrollment is likely to come from people who are not currently enrolled through the exchange.
In December 2019, Senators Patty Murray (D, WA) and Ron Wyden (D, OR), and Congressmen Frank Pallone Jr. (D, NJ) and Richard Neal (D-MA) sent a letter to CMS, asking them to step in and prevent Your Health Idaho from offering enhanced short-term plans through the exchange. They noted that the ACA only allows qualified health plans (QHPs) to be sold in the exchange. And while Idaho’s enhanced short-term plans offer much more robust coverage than a typical short-term plan, they are not QHPs.
[There is one error in the letter, however: It states that Idaho’s plans wouldn’t have to cover essential health benefits, when in fact, they are required to do so in accordance with the state’s benchmark plan.]
Idaho’s requirements for enhanced short-term plans
Rulemaking activity for Idaho’s new enhanced short-term plans is available here. The state published temporary rules that took effect in July 2019, and a proposed final rule was published in October 2019.
- Insurers can choose to offer year-round availability or to limit enrollment to the same enrollment window that applies to ACA-compliant plans. If the plan is available year-round, the insurer can impose a waiting period for pre-existing conditions. If the plan is only available during open enrollment, no pre-existing condition waiting period can be applied (SelectHealth and Blue Cross of Idaho have both filed forms indicating that their plans will have waiting periods for pre-existing conditions).
- Insurers that offer enhanced short-term plans must also offer qualified health plans through Your Health Idaho (the state-run exchange) in the same areas.
- Enhanced short-term plans must be offered on a guaranteed-issue basis (but insurers can base premiums on medical history, and can impose a waiting period for pre-existing conditions).
- Coverage under an enhanced short-term plan is considered qualifying coverage that allows a person’s pre-existing condition waiting period to be waived. So if a person renews their short-term plan after the first year, there will no longer be any waiting periods for pre-existing conditions during the second year.
- Enhanced short-term plans must be guaranteed renewable (for up to 36 months of total duration). The insurer cannot require a new application or new medical history questions during the renewal process.
- Although the plans are capped at 36 months (in accordance with federal rules for short-term plans), insurers are required to allow enrollees to re-enroll in a new plan after the first one expires, and no new application or medical history questions can be used.
- When a person has had coverage under an enhanced short-term plan for at least 11 months and the policy is terminating, they are eligible to enroll in any of the insurer’s ACA-compliant plans at that point (regardless of whether open enrollment is underway).
- Enhanced short-term plans cannot vary rates based on gender, although they can use an applicant’s medical history to set rates.
- Geographic rating areas must be the same as the rating areas used for ACA-compliant plans.
- Enhanced short-term plan enrollees must be incorporated into the same risk pool as the insurer’s other individual market enrollees.
- Enhanced short-term plans must provide benefits in line with the state’s benchmark plan for essential health benefits, and cannot impose annual benefit caps under $1,000,000.
Regular non-renewable short-term plans of up to six months continue to be available in Idaho. They are not guaranteed issue, but premiums can only vary based on age, tobacco use, and zip code (this is generally how rating rules work for short-term plans nationwide; applicants are either accepted or declined based on overall medical history; if they’re accepted, the premiums are based on only a few variables).
Idaho and short-term insurance regulations
The Idaho Department of Insurance published a news release in 2016, cautioning residents about the potential drawbacks of short-term health insurance, while noting that the plans can be appropriate for people who missed open enrollment and don’t have access to a special enrollment period for ACA-compliant coverage. This was well before the state created the new “enhanced” short-term plan pathway, and although the drawbacks noted in the news release are still applicable to regular short-term plans, they mostly do not apply to the enhanced short-term plans.
Which insurers offer short-term plans in Idaho?
- Blue Cross of Idaho (enhanced short-term plans available for purchase as of December 1, 2019)
- Companion Life
- Everest Reinsurance (Everest and Everest Prime)
- Independence American Insurance Company
- Life Map
- SelectHealth (non-renewable short-term plans are available (details are in SERFF filing SLCT-132040372). And forms have been filed with the state (SERFF filing number SLCT-132118836) for enhanced short-term plans with a proposed effective date of 1/1/20.)
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.