Frequently asked questions about
short-term health insurance in Colorado
No. Under Colorado’s strict new regulations, no insurers offer short-term plans in the state.
Although Colorado already had fairly robust regulations pertaining to short-term plans, the state drastically tightened its requirements for short-term plans as of April 2019. As a result, there are no longer any insurers offering short-term health insurance in Colorado.
Colorado has its own regulations pertaining to short-term health insurance. The Trump administration relaxed the federal rules as of October 2018, allowing longer durations for short-term plans. States can still impose their own restrictions, however, and Colorado opted to significantly strengthen the regulations that already existed in the state.
Colorado’s updated rules for short-term health plans are described below. But no insurers have offered short-term plans in the state since the new rules took effect, making them essentially moot (although their strictness is the reason there are no longer any short-term plans for sale in Colorado).
In 2018, Colorado regulators began working on new regulations for short-term health insurance plans. There was a hearing about the new proposed rules in December, and Colorado’s Insurance Commissioner approved the new regulations in January 2019. They took effect on April 1, 2019, and include the following changes:
- Short-term plans have to charge older adults no more than three times as much as they charge younger adults. Short-term plans are generally not available after a person is 64, but a quick check of plans that were available in Colorado in early 2019 showed that some insurers were charging a 64-year-old up to seven times as much as a 21-year-old.
- Short-term plans have to be guaranteed-issue. Insurers can no longer reject applicants based on their medical history. This was a huge change, as short-term plans previously based eligibility on a series of basic health screening questions. That had to change as of April 2019, which was a major factor in the exodus of all short-term insurers from Colorado.
- Short-term plans can still exclude pre-existing conditions, but pre-existing conditions are defined in the regulations as a condition that was diagnosed, treated, or symptomatic in the 12 previous months.
- Short-term plans have to cover not only state-mandated healthcare benefits (this was already required pre-2019), but also the ACA’s essential health benefits. This is part of Colorado Revised Statute 10-16-102(22), and that provision applies to short-term plans as of April 2019. So short-term plans can no longer avoid covering prescription drugs or mental health care, which was previously common in the industry.
Note that short-term healthcare plans in Colorado are required to provide coverage for maternity care, as Colorado mandated maternity coverage on all state-regulated plans as of 2011. But maternity is only covered on a short-term plan in Colorado if the pregnancy begins after the short-term plan takes effect, and the coverage ends when the short-term plan terminates. So in reality, only the first portion of a pregnancy would ever be covered under a short-term plan in Colorado. And if a pregnant woman were to apply for another short-term plan after the first plan ends, her application would be rejected, since the pregnancy would be a pre-existing condition.
Colorado already had extensive filing requirements (regulation 4-2-59) for insurers that wished to sell short-term insurance plans in the state, including a requirement that rates for short-term plans could only vary based on age, tobacco use, geographic area, network factors, and whether the policy covers a single individual or multiple family members (this is the rule that was amended as of April 2019, to include the 3:1 ratio cap for age-based premiums; network factors was also eliminated from the list of things on which insurers can base premiums).
The filing requirements previously included a rule stating that carriers must have a loss ratio of at least 60% (unlike the ACA’s medical loss ratio, which excludes certain expenses from the calculation, Colorado’s calculation is just total claim amounts divided by total premiums collected). The updated version of Regulation 4-2-59 requires a minimum loss ratio of at least 80%.
As noted above, there are no longer any short-term plans for sale in Colorado, due to the state’s new rules that took effect in 2019. But the state does technically have limits on the duration of short-term plans, as described here:
Under long-standing Colorado state rules, short-term plan duration can’t exceed more than six months, and cannot be renewable (see Colorado Revised Statutes Title 10 Insurance § 10-16-102 Definitions, section 60).
In addition, short-term health insurance in Colorado cannot be issued to anyone who has had coverage under more than one short-term plan in the prior 12 months. These are both longstanding rules in Colorado that predate the Obama and Trump administrations.
So a person in Colorado could buy a short-term plan with a six-month term, and then buy one more short-term plan after the first ends. But after that, they’d have to wait at least six months before being able to purchase a third short-term plan. Under the terms of this rule, the state has always prevented people from stringing together multiple short-term plans instead of purchasing regular health insurance. But it’s fairly irrelevant now that there are no longer any short-term plans available in Colorado.
Since short-term health plans are not currently available in Colorado, we advise you to check to see whether you’re eligible to enroll in an ACA-compliant major medical plan. Open enrollment for these plans runs from November 1 to January 15 in Colorado’s marketplace/exchange.
If you’re trying to buy coverage outside of that window, you may be eligible for a special enrollment period that would allow you to buy an ACA-compliant plan (through the marketplace, Connect for Health Colorado, or directly from a health insurance company), if you experience a qualifying life event.
ACA-compliant plans are purchased on a month-to-month basis, so you can enroll in coverage even if only for a few months before another policy takes effect. So if you’ll soon be enrolled in Medicare or a new employer’s plan, for example, and just need coverage for a few months until your other plan takes effect, you can still use an ACA-compliant plan for that purpose and then cancel it once you have coverage under another plan.
And if your total household income for the year makes you eligible for a premium subsidy, you may end up with monthly premiums that are much less costly than you thought they would be.
Depending on your income you may also qualify for health insurance in Colorado under expanded Medicaid coverage. When the Affordable Care Act was enacted in 2010, Medicaid expansion was a cornerstone of lawmakers’ efforts to expand realistic access to healthcare to as many people as possible. Adults under the age of 65 can enroll in Medicaid in Colorado with a household income up to 138% of the poverty level.
Some Colorado residents opt to use other non-ACA-compliant health plans, including direct primary care and health care sharing ministry plans (Colorado is among the states with the highest enrollment in health care sharing ministry plans). But these plans are not considered health insurance, and do not come with the regulatory oversight and legal requirements that go along with health insurance. Enrolling in them is very much a “buyer beware” situation, and it’s important to fully understand their limitations and exclusions before attempting to use them in place of real major medical health insurance. And if you’re considering using these sorts of plans to cover the gap before you’re enrolled in Medicare, know that they would not count as the creditable coverage that would be necessary in order to avoid a pre-existing condition waiting period for Medigap plans.