Buying a short-term plan in Maine
- Maine limits the initial term of a short-term plan to less than 12 months.
- State regulations allow for renewal, but the total duration of the plan cannot exceed 24 months.
- Maine imposes several benefit mandates and a medical loss ratio rule for short-term plans.
- At least three insurers offer short-term plans in Maine.
Short-term plan duration is limited in Maine
Maine defines a short-term health insurance plan as a policy that lasts less than 12 months. A person can apply for additional short-term plans, but the total combined term of successive short-term plans cannot exceed 24 months. [See 24-A M.R.S. § 2849-B (8)].
Until October 2, 2018, federal rules limited short-term plans to three months and prohibited renewals. But those limits have been relaxed under the Trump Administration’s new regulations. Short-term plans can now have initial terms of up to 364 days (ie, the same as Maine’s statute), but the new federal rules also allow a short-term plan to have a total duration, including renewals, of up to 36 months.
The regulations are clear in noting that states may have more restrictive rules than the new federal guidelines, in which case, the state’s laws apply. That means a person in Maine can only have 24 months of continuous short-term coverage. A plan that renews for up to 36 months is not allowed, since the state’s laws supersede the federal rules for short-term plans.
Maine regulations and mandates for short-term plans
The Maine Bureau of Insurance reviews filings for short-term plans, and there are numerous state mandates that apply to short-term plans in Maine. The short-term plan filing requirements, including applicable mandates, are available here, under “Individual Major Medical Short Term.”
A few notable benefit mandates are mental health parity, PSA testing for men age 50-72 (not required to be covered under federal regulations, even on ACA-compliant plans), and outpatient prescription drugs (if there’s a benefit cap it must be at least $1,500/year, and the cost-sharing can’t exceed 50 percent for the insured).
Maine requires short-term plans to have medical loss ratios of at least 50 percent (see Bureau Rule 940). The ACA requires individual major medical plans to have medical loss ratios of at least 80 percent, but that federal rule does not extend to short-term plans and the loss ratio calculations are different for short-term plans. Although Maine does have a requirement for short-term plans’ medical loss ratios, it’s well below the average loss ratio for short-term plans nationwide, which is about 67 percent.
Which insurers offer short-term plans in Maine?
- Independence American Life
- National General (National Health Insurance Company)
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.