If you missed Obamacare's open enrollment, you still have options.

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Miss open enrollment? You’ve got options.

If you missed open enrollment, your health insurance options are limited, but you can still get coverage – including short-term plans

Open enrollment for 2017 coverage is over, and open enrollment for 2018 coverage will run from November 1, 2017 to December 15, 2017 (HHS plans to keep this same schedule in future years as well). For most people, that means the opportunity to purchase individual health insurance is very limited for the rest of the year. But there are still coverage options available.

Native Americans can enroll year-round, as can people who qualify for Medicaid or CHIP. And applicants who experience a qualifying event gain access to a special open enrollment window to shop for plans in the exchange (or off-exchange, in most cases) with premium subsidies available in the exchange for eligible enrollees (note that HHS stepped up enforcement of special enrollment period eligibility verification in 2016, and has further increased the eligibility verification process in 2017; if you experience a qualifying event, be prepared to provide proof of it when you enroll)

But without a qualifying event, health insurance is not available outside of general open enrollment, on or off-exchange. (Nevada is an exception: off-exchange plans in Nevada are available for purchase year-round, but the carrier can impose a 90-day waiting period before coverage takes effect).

Unfortunately, this fact has caught many people by surprise over the last few years. And although the open enrollment period for 2017 coverage followed the same schedule as the one for 2016 coverage, the first three open enrollment periods (2014, 2015, and 2016) all had different start and end dates, which further added to the confusion. The first open enrollment period was six months long; the second and third were both three months, but the dates were different.

For 2018, HHS had originally planned to keep the same November 1 – January 31 schedule, but a market stabilization rule finalized in April 2017 shortens open enrollment for 2018, scheduling it to run November 1, 2017 – December 15, 2017 (the same schedule that was already planned for 2019 coverage and beyond). The change was not without controversy, as there’s disagreement in terms of whether a shorter open enrollment period for 2018 coverage will have a market stabilizing effect. California’s Insurance Commissioner, for example, believes it will do the opposite. And Colorado announced in June 2017 that they would add an extra four weeks at the end of the scheduled open enrollment period (state-run exchanges that have their own enrollment platform have some flexibility on issues like this that states using HealthCare.gov do not).

Millions of Americans secured coverage for 2017 during the last open enrollment period, and many more have obtained coverage later in the year during special enrollment periods triggered by qualifying events.

But for those who didn’t enroll in coverage by the end of open enrollment and aren’t expecting a qualifying event later in the year, the options for the rest of the year are limited to policies that are not regulated by the ACA. This includes short-term health insurance, some limited-benefit plans, accident supplements, critical/specific-illness policies, dental/vision plans, and medical discount plans.

Closest thing to ‘real’ insurance, but duration now capped at less than three months

Some of these policies are a good supplement to regular major medical health insurance. But most of them are not a good option to serve as stand-alone medical coverage – except short-term health insurance, which is available in all but five states.

Short-term coverage is the closest thing you can get to “real” health insurance if you find yourself needing to purchase a policy outside of open enrollment without a qualifying event. Prior to March 31, 2017, most short-term plans were capped at six months in duration, although in some states, short-term plans were available with a duration of 364 days.

Through 2016, the federal definition of a short-term plan was a duration of fewer than 12 months. That changed on January 1, 2017, however, and federal rules now cap new short-term plans at less than three months in duration. HHS is not taking regulatory action against short-term plans that were sold before April 1, 2017, even if they had a duration longer than three months, as long as they’re scheduled to end by the end of 2017. But short-term plans issued April 1, 2017 or later must limit coverage to less than three months in duration (note that several GOP Senators have asked HHS to reverse this regulation and go back to allowing short-term plans to be issued for durations up to 364 days).

The Obama-Administration HHS proposed the regulation to cap short-term plans at three months in an effort aimed at “curbing abuse” of short-term plans. At that point, under HHS Secretary Sylvia Matthews-Burwell, HHS noted that short-term plans are exempt from having to comply with ACA regulations specifically because they’re supposed to only be used to fill gaps in coverage — but instead, people had been using them for up to a year at a time, which effectively removes healthy people from the ACA-compliant risk pool, destabilizing it over the long-run.

Although premium subsidies are not available for short-term plans, the retail prices on these policies are very affordable, and they do still serve as a good stop-gap if you just need a policy to cover you for up to three months when you’re in between other policies. However, if your income makes you eligible for the Obamacare premium subsidies, it’s essential that you enroll through your state’s exchange during open enrollment (or a special enrollment period triggered by a qualifying event like losing access to your employer-sponsored health insurance); otherwise, you’re missing out on comprehensive health insurance and a tax credit.

Some short-term plans have provider networks, but others allow you to use any provider you choose. Unlike ACA-compliant plans, short-term policies have benefit maximums. But the limits tend to be more reasonable than the infamous “mini-med” plans that barely covered a few nights in the hospital.

Lifetime maximums of $750,000 to $2 million are common on short-term plans. While this is not as good as regular individual insurance plans that no longer have annual or lifetime benefit caps, it’s roughly similar to a lot of the plans that were available just a few years ago in the individual market.

Ease of application

The application process is very simple for short-term policies. Once you select a plan, the online application is much shorter than it is for standard individual health insurance, and coverage can be effective as early as the next day.

There are no income-related questions (since short-term policies are not eligible for any of the ACA’s premium subsidies), and the medical history section is generally quite short – nowhere near as onerous as the pre-2014 individual health insurance applications were.

Keep in mind that although the medical history section generally only addresses the most serious conditions in order to determine whether or not the applicant is eligible for coverage, short-term plans all have blanket disclaimers stating that no pre-existing conditions are covered.

Not ACA-regulated

To be clear, short-term plans are not as good as the ACA-regulated policies that you can purchase during open enrollment or during a special enrollment period. Short-term insurance is not regulated by the ACA, so it doesn’t have to follow the ACA’s rules:

  • The plans still have benefit maximums, and they are not required to cover the ten essential benefits. (Most often, short-term plans don’t cover maternity, preventive care, or mental health/addiction treatment), they do not have to limit out-of-pocket maximums, and they do not cover pre-existing conditions. They also still use medical underwriting, so coverage is not guaranteed issue.
  • And the plans are not renewable. In most states, you have the option to apply for a new policy after the first one ends (the second policy would also be capped at no more than three months in duration), but you’ll be going through the application process as a new enrollee, and any health conditions that developed while you were covered by the first policy would be considered pre-existing conditions under the second policy.

Although loss of existing minimum essential coverage is a qualifying event that triggers a special open enrollment period for ACA-compliant plans, short-term policies are not considered minimum essential coverage, so the loss of short-term coverage is not a qualifying event. Let’s say you lose your job and your employer plan ends at the end of July. You then have a 60-day window during which you can enroll in an ACA-compliant plan. You also have the option to buy a short-term plan that could cover you for August, September, and October. But when the short-term plan ends, you would no longer have access to an ACA-compliant plan (you’d have to wait for open enrollment, and a plan selected during open enrollment would become effective on January 1) and although you could purchase another short-term plan, your eligibility would again depend on your current medical history.

In addition, since short-term health insurance is not considered minimum essential coverage, you’ll still be on the hook for the ACA’s shared responsibility penalty if you rely on a short-term plan for your coverage. There’s an exemption from the penalty if you only have a short gap in coverage that lasts no more than two months (you could have a short-term plan during that two months and would not be subject to the penalty).

Be aware that the penalty got much higher in 2016, although it has remained at the same level for 2017 (the flat-rate penalty was scheduled to be indexed for inflation starting in 2017, but the inflation adjustment was zero for 2017). For 2016, and again for 2017, the penalty is the greater of: $695 per uninsured adult (half that amount for a child), up to $2,085 for a household, OR 2.5 percent of household income above the tax filing threshold. The penalty is prorated for the number of months you’re uninsured or covered by a policy that’s not minimum essential coverage (like a short-term plan).

The Better Care Reconciliation Act (BCRA), introduced in the Senate in June 2017, would eliminate the individual mandate penalty altogether, retroactive to the start of 2016 (this would result in higher premiums in the ACA-compliant market, since healthy people would be the ones likely to drop coverage if the mandate penalty were to be eliminated). But for the time being, there is still a penalty for being uninsured in 2017, and unless Republicans are able to get enough votes to pass their ACA replacement bill, the penalty will remain in place in future years as well.

Although short-term plans do not provide the level of coverage or consumer protections that the new ACA-compliant plans offer, obtaining a short-term policy is better than remaining uninsured. But your best bet is to maintain coverage under an ACA-compliant policy; if you’re not enrolled, you’ll want to do so if you experience a qualifying event (most people don’t take advantage of their qualifying events, perhaps unaware that their opportunity to enroll is limited).

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