Buying a short-term health plan in New Mexico
- New regulation limits short-term plans to three months, bans renewals, and prohibits sale to anyone who has had a short-term plan in the past 12 months.
- Plans with longer terms that were approved by the state prior to February 2019 were allowed to be sold until late April 2019, but must terminate no later than the end of 2019.
- As of mid-2019 there appear to be no short-term plans for sale in New Mexico.
- New Mexico enacted legislation in 2019 to further regulate short-term plans.
- National General offered short-term plans in New Mexico through early 2019, but plans are no longer for sale as of mid-2019.
New rule limits short-term plans to no more than three months in New Mexico
The Trump administration began allowing short-term health insurance plans to be offered with extended durations as of October 2, 2018, unless a state had its own restrictions. At that point, New Mexico did not yet have its own limits on short-term plans. So for a few months, short-term plans with initial terms of up to a year were available for purchase in the state.
But in September 2018, the New Mexico Office of the Superintendent of Insurance (OSI) and Health Action NM (an advocacy group for universal access to health care) presented details about potential state actions to stabilize the individual market. OSI has the authority to regulate some aspects of the plans, including maximum duration, but they noted that legislation would be needed for other changes, including minimum loss ratios and benefit mandates.
New Mexico’s insurance regulations were amended, effective February 1, 2019, to define short-term plans as nonrenewable, and with terms of no more than three months. The regulations also prohibit insurers from selling a short-term plan to anyone who has had short-term coverage within the previous 12 months.
The new rules took effect at the beginning of February 2019, but 12-month short-term plans were still for sale at that point via various online brokerages. The New Mexico Office of the Superintended of Insurance (OSI) confirmed that while the new rules for short-term plans did take effect in February, there were still plans for sale that were approved prior to that date, and those could continue to be sold under their already-approved terms. But any new plans that are submitted to state regulators for approval must have term limits of no more than three months, and be non-renewable, and OSI clarified in April 2019 that insurers had to immediately stop selling non-compliant short-term plans. Any such plans that had already been sold must terminate no later than December 31, 2019.
By mid-2019, a search of various online brokerages indicated that there were no longer any short-term plans for sale in New Mexico. There are other states (California, Washington, Colorado, and Hawaii) where regulations for short-term plans have been strengthened since 2018 and insurers have abandoned the short-term market.
In January 2019, HB285 was introduced by Rep. Micaela Cadena (D, 33rd District) in an effort to much more closely regulate short-term plans in New Mexico. The legislation passed with unanimous support in both the House and Senate, and was signed into law by Governor Lujan Grisham in March 2019.
HB285 includes the same durational and sales limits that the state has already implemented via regulation, but it goes further than that. The legislation also gives OSI the authority to regulate a wide range of provisions related to short-term plans, including minimum loss ratios and minimum standards as far as benefits that have to be covered by the plans, including state-mandated benefits.
Which insurers offer short-term plans in New Mexico?
The New Mexico Office of the Superintendent of Insurance has confirmed, in bulletin related to HB285 implementation, that while compliant short-term health plans may continue to be sold, they cannot be renewed. But as noted above, there do not appear to be any short-term plans for sale in the state as of mid-2019.
National General still offered short-term plans in New Mexico as of March 2019, and at that point, their plans were still available with initial terms of up to a year. As noted above, this was because those plans were approved by the state prior to the effective date of the state’s new rules for short-term plans, and the state stopped allowing those plans to be sold as of April 2019. By mid-2019, National General’s plans were no longer available.
Blue Cross Blue Shield of New Mexico was offering short-term plans as of early 2019, but the insurer’s sales department confirmed in March 2019 that short-term plans were no longer for sale. It was unclear whether that was a temporary change or if the plans had been permanently removed from BCBSNM’s product line.
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.