Short-term health plans in Maryland
- Maryland enacted legislation in 2018 to limit short-term plans to three months and prohibit renewal.
- The new federal rules, allowing for extended short-term plans, do not apply in Maryland.
- As of October 2019, a new law requires short-term health insurance in Maryland to cover mental health care, including treatment for substance abuse disorders.
- Various other state-mandated benefits must be included in short-term plans sold in Maryland.
- Maryland’s Insurance Administration conducted a comprehensive study of short-term plans in 2017.
- At least four insurers offer short-term health insurance in Maryland.
The Maryland Insurance Administration conducted a study of short-term health insurance plans in 2017, resulting in a detailed report about the state’s short-term market and associated state regulations. The study was to determine whether Maryland had a need for short-term plans sold by non-admitted insurers, in addition to the already-available short-term plans sold by admitted insurers. (Here’s a summary of what admitted and non-admitted mean.) Ultimately, the Maryland Insurance Administration recommended that the legislature continue to allow only admitted insurers to offer short-term health insurance in Maryland.
Maryland’s short-term health insurance regulations
The Maryland Insurance Administration’s (MIA) report notes that short-term plans must be filed with the MIA, reviewed, and approved before they can be sold. State-mandated benefits must be covered, including “some level of coverage for medically necessary expenses incurred as a result of inpatient room and board, hospital care, intensive care, emergency room care, surgical care, diagnostic services, outpatient treatments, and doctor visits. Mandated benefits in Maryland include coverage for preventive care screenings, habilitative services, mental health and substance misuse, and other services that the legislature has determined should be provided to Maryland residents.”
Admitted insurers selling short-term plans in Maryland are also required to have processes in place to handle preauthorizations, appeals, and grievances.
The Maryland Insurance Administration maintains a page called “Is a short-term medical plan for you?” with details that help consumers understand how the plans work.
Short-term health plan duration in Maryland
Until October 2, 2018, federal regulations limited short-term plan duration to no more than three months, and renewals were prohibited. Much longer short-term plans are allowed under the new federal regulations, unless a state imposes its own restrictions.
Maryland enacted HB1782 in 2018, which limits short-term plans to three months and prohibits renewal. The Trump Administration’s new rules for short-term plans are clear in noting that states may continue to impose tighter regulations than the new federal rules. So, short-term health insurance in Maryland will continue to be nonrenewable and have maximum terms of three months.
New law requires short-term plans to cover mental health care as of October 2019
In April 2018, Maryland enacted SB28, which had passed unanimously in both chambers of the state legislature. The legislation takes effect October 1, 2019, and requires short-term plans issued on or after that date to provide coverage for treatment related to “mental illness, emotional disorders, drug misuse, or alcohol misuse.”
The scope of the coverage will be left up to the insurers to some degree, but there are some basic requirements incorporated in the legislation in order to ensure that Maryland’s existing mental health parity law will apply to short-term health plans:
- The plans must include coverage for medically necessary mental health and substance abuse treatment, including both inpatient and outpatient care.
- The partial hospitalization benefit cannot be limited to fewer than 60 days.
- Managed care can be used to deliver the mental health/substance abuse coverage, but only insofar as the plan uses managed care to deliver benefits for physical illnesses/injuries. And factors used to manage the benefits cannot be any more stringent for mental health/substance abuse coverage.
- If insurers charge a copay for methadone maintenance treatment, it cannot be more than 50 percent of the cost of the treatment.
As of August 2019, most of the short-term coverage for sale in Maryland include exclusions for mental health and/or substance abuse care. But that will have to change as of October when the new requirements take effect.
It’s important to understand, however, that short-term health plans are still medically underwritten: Pre-existing conditions are generally not covered at all, and an insurer can reject an applicant altogether if they have medical conditions that aren’t compatible with the insurer’s underwriting requirements. For some of Maryland’s most popular short-term health insurers, this includes a history of mental illness or substance abuse.
So while short-term health plans in Maryland will have to cover mental health and substance abuse treatment just as they would any other medical condition, people who have existing mental health or substance abuse issues will generally not be able to receive treatment for these conditions under a short-term plan. Instead, it would have to be a new condition that arises during the time the person has a short-term plan.
Which insurers offer short-term plans in Maryland?
Maryland has four insurers that offer short-term plans as of 2019:
- Freedom Life
- Independence American Insurance Company (was not actively marketing policies as of 2017, but had indicated that they intended to do so in the near future, and their plans are actively for sale as of 2019)
- National General
- Standard Security (as of 2017, the majority of the short-term plans sold in Maryland were issued by Standard Security)
Who can buy short-term health insurance in Maryland?
Short-term health insurance in Maryland can be purchased by residents who can meet the underwriting guidelines of insurers. 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 insurance plans usually exclude pre-existing conditions, so they are not adequate for someone in the Old Line State who needs medical care for ongoing or pre-existing conditions. It is advisable to seek a medical insurance policy that will cover those needs.
If you’re in need of health insurance coverage in Maryland, first check if you’re eligible for a special enrollment period that would allow you to enroll in an ACA-compliant major medical plan. A variety of qualifying life events can trigger a special enrollment period and allow you to buy a plan through the health insurance exchange in Maryland. These plans are purchased on a month-to-month basis, so you can enroll even if you only need coverage for a few months before another policy takes effect (with a premium subsidy if you’re eligible).
When should I consider short-term health insurance in Maryland?
Whether you’re in Hagerstown or Baltimore, there may be scenarios when a short-term health insurance plan might be the only realistic option, such as:
- If you missed open enrollment for ACA-compliant coverage and lack a qualifying event to trigger a special enrollment period.
- If you’re not eligible for Medicaid or a premium subsidy for ACA-compliant coverage.
People who are ineligible for premium subsidies include:
- Folks who earn at or over 400% of the poverty level. (For 2021 coverage, that’s $51,040 for a single person. If your ACA-specific modified adjusted gross income is slightly above the subsidy-eligible threshold, there are steps you can take to reduce it).
- People 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.