Short-term health plans in Montana
- Montana defers to the federal rules for short-term plans: Short-term plans are allowed to have initial terms of up to 364 days, and total duration, including renewals, of up to 36 months (but all of the available plans have maximum terms of six months).
- Legislation was introduced in 2019 to limit short-term health insurance in Montana to three months, but it did not pass.
- Montana’s current Insurance Commissioner views short-term plans favorably, while his predecessor did not.
- Montana has secured restitution for up to 3,645 people who may have been misled by short-term insurers that marketed plans in Montana between 2012 and 2016.
- At least three insurers offer short-term health insurance in Montana.
Montana’s short-term health insurance regulations
Montana published guidance in 2018, clarifying that the state is deferring to federal rules for short-term health insurance plans. The state has also published a series of FAQs about short-term health insurance in Montana, including details about state-mandated benefits and state regulations that apply to short-term plans.
From 2009 to 2016, Monica Lindeen was the Commissioner of Securities and Insurance in Montana. Lindeen, a Democrat, was term-limited in 2016 and could not seek re-election that year. Matt Rosendale, a Republican, won the election in 2016 and assumed office as the Commissioner at the start of 2017 (Rosendale also ran unsuccessfully to unseat Senator Jon Tester, a Democrat, in the 2018 election; Rosendale lost that race, so he continues to be Montana’s Insurance Commissioner).
The two Commissioners have differing approaches to health care reform, and to short-term health insurance. Lindeen’s office warned consumers early in 2016 about the potential shortcomings of short-term health insurance, while Rosendale has been much more open to the idea of short-term plans.
State secures restitution for people who were misled by short-term insurers
Lindeen’s office took action against several short-term health insurers and insurance producers in 2016, alleging that they had sold short-term plans to Montana residents without adequate licensing, and without communicating the fact that these plans didn’t cover pre-existing conditions, didn’t count as health insurance in terms of avoiding the individual mandate penalty (which applied from 2014 through 2018, and was assessed on people who were enrolled in short-term health plans) and could not be considered comprehensive coverage.
The issue was resolved with an agreement (finalized three days after Rosendale took over as Commissioner) that refunds would be offered to residents who had purchased the policies in question.
Rosendale’s office has since secured nearly $285,000 in restitution that can be paid to as many as 3,645 policyholders in Montana, although people will have to demonstrate that they were misled by one of the insurers or agents deceptively marketing short-term plans between 2012 and 2016. The primary insurer in the case is Health Insurance Innovations, but there are several other insurers and individuals who paid into the restitution fund, and Commissioner Rosendale has sent letters to the 3,645 people who were identified by his office as possibly having been misled by one of them. There is a form included with the letter that people must fill out in order to claim restitution funds, and it has to be returned to Rosendale’s office by November 9, 2019.
Although Rosendale has pursued restitution for people who were misled by deceptive marketing tactics used by some short-term insurers, his approach tends to be more welcoming of short-term health insurance in Montana than Lindeen’s (which is in line with his general opposition to the ACA). Although he has noted that it’s essential for consumers to be well-informed about what they’re purchasing, he’s in favor of expanding health insurance options “outside the scope of Obamacare regulations” (Rosendale has also championed health care sharing ministries as an alternative to ACA-compliant coverage).
Rosendale believes longer short-term plans will be purchased by people who have been uninsured, and thus isn’t concerned about the potential for short-term health insurance plans to destabilize the existing ACA-compliant market (there’s debate about this — it’s true that people who are uninsured may gravitate to the short-term market, but hundreds of thousands of people nationwide are expected to switch from individual market plans to short-term plans now that they’ve been expanded, in part due to the elimination of the individual mandate penalty).
Short-term plan duration in Montana
Although short-term health insurance in Montana is allowed to have initial terms of up to 364 days, the three insurers that offer short-term plans in Montana all currently cap their plan terms at six months, and have have not started offering longer-term plans.
The Trump Administration’s new regulations allow short-term plans to have initial terms of up to 364 days, and total duration, including renewals, of up to 36 months (prior to October 2018, federal regulations limited short-term coverage to three months in duration, and prohibited renewals).
During the 2019 legislative session, Representative Tom Winter (D, Missoula) introduced H.B.503, which would have limited short-term plan duration to three months. But the legislation did not pass, and Montana continues to allow short-term plans to be issued with initial terms of up to 364 days.
Which insurers offer short-term plans in Montana?
- Independence American Insurance Company
- National General
- UnitedHealthcare (Golden Rule)
As noted above, all of these insurers currently cap their plan terms at six months.
Who can get short-term health insurance in Montana?
Short-term health insurance in Montana can be purchased by residents who can meet the underwriting guidelines of insurers. This usually means being under 65 years old (some insurers put the age limit at 64 years) and in fairly good health.
Short-term health coverage typically includes blanket exclusions for pre-existing conditions, so these types of plans are not adequate for someone in Big Sky Country 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 Montana, first verify if you’re eligibility for a special enrollment period that would allow you to enroll in an ACA-compliant major medical plan. There are a variety of qualifying life events that will trigger a special enrollment period and allow you to buy a plan through the health insurance exchange in Montana. These marketplace plans are purchased on a month-to-month basis, so you can enroll even if you need coverage for a few months before another policy takes effect (it can also can include a premium subsidy if you’re eligible).
When should I consider short-term health insurance in Montana?
There may be situations when you find short-term health insurance as the only realistic option, for example:
- If you missed open enrollment for ACA-compliant coverage and lack a qualifying event that would trigger a special enrollment period.
- If you’re not eligible for Medicaid or a premium subsidy in the exchange, an ACA-compliant plan might be unaffordable.
People who are ineligible for premium subsidies include:
- Folks earning over 400% of the poverty level, (that’s $51,040 for a single person in 2021 coverage). 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 trapped 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.