Short-term health plans in Arizona
- As of August 2019, short-term health insurance in Arizona is allowed to follow federal durational limits, with initial terms of up to 364 days and total duration of up to 36 months.
- Prior to the new law, short-term health insurance plans in Arizona couldn’t have durations longer than 185 days, and if the plan was renewable, the renewal term couldn’t be more than 180 days.
- Insurers can cap their plans at shorter durations in Arizona.
- At least eight insurers offer short-term health insurance in Arizona.
Arizona’s short-term health insurance regulations
Until the summer of 2019, short-term health insurance in Arizona was limited to a plan duration of no more than 185-day terms, and if renewal was available, the renewal term couldn’t be more than 180 days.
But Arizona enacted legislation (SB1109) in 2019 that aligns durational limits for short-term health insurance in Arizona with the Trump administration’s rules that took effect in 2018. Under the new law, short-term plans in Arizona can have initial terms of up to 364 days, and can be renewable for a total duration of up to 36 months.
SB1109 did not include a specific effective date, and the consumer guide that the Arizona Department of Insurance published only noted that the new rules would take effect in “the summer of 2019.” But the Arizona Department of Insurance confirmed by email that the new rules would take effect August 27, 2019.
SB1109 clarified that the state would update Arizona Revised Statutes Title 20, Chapter 6, Article 4, with a new section, 20-1384, which was added in late August.
By September 2019, there were some 364-day plans available for sale in the state, although most of the insurance companies that offered short-term medical plans in Arizona were still selling healthcare plans with terms of up to six months.
Which insurers offer short-term plans in Arizona?
The market for short-term health insurance in Arizona is robust, and there are numerous insurance companies that provide short-term insurance plans:
- Aspen Insurance
- Blue Cross Blue Shield of Arizona (in partnership with IHC)
- Companion Life
- Everest Reinsurance
- Golden Rule (UnitedHealthcare)
- Independence American Insurance Company
- National General
- United Security Health and Casualty
Contact information for several of these insurers is listed in the Arizona Insurance Department’s guide to short-term plans.
Some of these insurers offer plans with 364-day terms, while others limit their terms to shorter periods of time. The coverage limitations and specific benefits offered by each company will vary too. So it’s important to carefully compare the plan options you’re considering before making a purchase, and make sure you understand the potential out-of-pocket costs (including costs for any service that simply isn’t covered at all).
Who can get short-term health insurance in Arizona?
Short-term health insurance in Arizona can be purchased by residents who can meet the underwriting guidelines of insurers. In general, this means being under 65 years old and in fairly good health.
Short-term plans almost always include blanket exclusions for pre-existing conditions, so short-term coverage is not adequate for someone in the Grand Canyon State who needs medical care for ongoing or pre-existing conditions. Short-term plans are also not required to cover the ACA’s essential health benefits. The most commonly excluded benefits are maternity care, prescription drugs, and mental health care, but you’ll want to make sure you understand what’s covered — and not covered — by each plan you’re considering.
If you need health insurance in Arizona, your first step should be to see whether you’re eligible to enroll in an ACA-compliant health plan (ie, an Obamacare plan), and whether you’ll qualify for premium subsidies (premium tax credits) to make that coverage more affordable.
Open enrollment for ACA-compliant individual/family (non-group) health plans runs from November 1 – December 15 in most states, and nearly anyone can enroll in coverage during that window. Outside that window, there are a variety of qualifying life events that will trigger a special enrollment period and allow you to enroll in an ACA-compliant major medical plan, either through the Arizona exchange/marketplace or directly through an insurance company (Obamacare rules apply both on-exchange and off-exchange). These policies are purchased on a month-to-month basis, so you can enroll in a plan even if you only need coverage for a few months before another policy takes effect — for example, if you’ll soon be enrolled in Medicare or a new employer’s plan and just need coverage until that other policy is active.
When should I consider short-term health insurance in Arizona?
There are times 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 do not have a qualifying event that would trigger a special enrollment period. You may be able to use a short-term medical plan until the next open enrollment period (either for an individual/family plan or a plan offered by your employer), at which point you can switch to a more permanent coverage option.
- If you’re newly employed and the business has a waiting period of up to three months before you can enroll in the group’s healthcare plan. You can use a short-term plan during this period, and schedule it to end when the employer-sponsored coverage starts.
- If you’ll soon be enrolling in Medicare and aren’t eligible for any other coverage in the meantime. If you’re fairly healthy and don’t need coverage for pre-existing conditions, you may be able to use a short-term medical plan until your Medicare coverage takes effect (note that if you’re already receiving Social Security retirement benefits, you’ll automatically be enrolled in Medicare when you turn 65; your Medicare card will arrive about three months before you turn 65, but your Medicare coverage doesn’t actually take effect until the first of the month you turn 65, so you can’t use the card until that point).
- If you’ve signed up for an ACA-compliant individual/family plan (or an employer’s plan) but have to wait up to several weeks before the plan takes effect. Individual/family enrollments completed during the annual open enrollment period don’t take effect until January 1. And for enrollments completed during a special enrollment period, coverage is generally effective either the first of the following month or the first of the second following month after the enrollment is completed. A short-term plan can provide emergency coverage (with an effective date as soon as the day after you apply) while you’re waiting for your new plan to take effect.
- If you’re not eligible for Medicaid or a premium subsidy in the exchange, the premium costs for ACA-compliant policies might be unaffordable. People who are ineligible for premium subsidies include:
- Those who earn more than 400% of the poverty level. (For 2021 coverage, that amounts to $51,040 for a single person. If your ACA-specific modified adjusted gross income is just a little above the subsidy-eligible threshold, there are steps you can take to reduce it).
- People ensnared by the ACA’s family glitch.
- People who are unable to enroll in a plan through the exchange/marketplace due to their immigration status. A valid lawfully-present immigration status is necessary in order to enroll in a plan through the exchange, and subsidies are only available through the exchange.
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.