Buying a short-term plan in Maine
- Effective January 2020, Maine has a new law relating to short-term plans (and no insurers have chosen to offer plans in the stateas of 2020)
- Under the new rules, short-term plans can only be sold in-person in Maine; they can no longer be sold online or over the phone.
- A short-term plan must terminate no later than December 31 of the year in which it’s issued.
- Consumers can only have short-term insurance for a maximum of 24 months, but short-term plans cannot be issued to anyone who has had coverage under another short-term plan within the previous 12 months.
- Under the new rules, short-term plans cannot be marketed or sold during the ACA’s open enrollment period (unless the plan is to take effect and terminate by the end of the year).
- A person enrolling in a short-term plan must be shown how the plan would compare with an ACA-compliant plan, and the comparison must account for premium subsidies if the person is subsidy-eligible.
- Maine imposes several benefit mandates and a medical loss ratio rule for short-term plans.
Maine’s rules for short-term plans became much stricter as of January 2020, and short-term plans are no longer available in the state
The Maine Bureau of Insurance has confirmed that as of 2020, there are no short-term plans for sale in Maine. Insurers can submit plans to the Bureau of Insurance at any time, so this could change later in the year. But as of early 2020, short-term plans cannot be purchased in Maine. Here’s the story of how that came to be:
When the Trump administration issued new rules in 2018 to extend the allowable duration of short-term health insurance plans, the Maine Bureau of Insurance reminded consumers that the state had its own regulations pertaining to short-term plans: Although initial terms of up to 12 months were allowed, the total combined term of successive short-term plans could not exceed 24 months.
And Maine enacted legislation (LD1260) in 2019 that sharply limits short-term plans in the state; the new rules took effect January 1, 2010, and are detailed in 24-A M.R.S. § 2849-B (8). The following rules now apply to short-term plans in Maine:
- Short-term plans can only be sold via an in-person meeting. They cannot be sold online or over the phone. So there are no longer any short-term plans for sale in Maine via any of the web brokerages that offer short-term plans in other states. And the Maine Bureau of Insurance has confirmed that there are simply no insurers marketing short-term plans in the state at all as of early 2020, so even brokers who sell meet clients face-to-face cannot offer short-term plans.
- Short-term plans must terminate no later than December 31 of the year in which they’re issued. So the later in the year a plan is sold, the shorter its maximum duration will be.
- The combined total amount of time a person can have short-term coverage is capped at 24 months.
- A short-term plan cannot be sold to someone who has had any short-term coverage within the previous 12 months.
- Short-term plans cannot be marketed or sold during the ACA’s annual open enrollment period for individual market coverage (November 1 to December 15 each year), unless the plan is scheduled to end by December 31. So it is permissible, for example, to sell a short-term policy in November that will only cover the person for the month of December. But it would not be permissible to sell a short-term policy in November with a scheduled effective date of January 1 of the coming year.
- The enrollee must be provided with a comparison of the short-term plan versus a qualified health plan (ie, an ACA-compliant plan), as well as an estimate of how much an ACA-compliant plan would cost after accounting for any premium subsidies that the person might be eligible to receive. The enrollee must also be provided with the dates for the next open enrollment period for ACA-compliant coverage, as well as contact information for the Maine health insurance exchange (HealthCare.gov).
The Maine Bureau of Insurance has issued consumer guidance regarding short-term plans and the state’s new requirements. This would be relevant if and when insurers opt to offer short-term plans in Maine.
Other 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?
As of 2019, there were three insurers offering short-term health plans in Maine (Everest, Independence American Insurance Company, and National Health Insurance Company). All of them were available for purchase online, and that’s no longer possible in Maine.
The Bureau of Insurance noted that one insurer did submit filings for 2020 plans, but subsequently withdrew the proposal, and the other insurers that previously offered short-term plans in Maine have not submitted plans for 2020. Insurers could still choose to file short-term plans that are compliant with Maine’s new rules, but none have done so as of early 2020.
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.