Availability of short-term health insurance in Kentucky

Yes. As of 2024, there were at least six insurers offering short-term health insurance in Kentucky.

The Kentucky Department of Insurance has put out a consumer guide to short-term health insurance, clarifying that the plans are not ACA-compliant and not regulated like regular major medical coverage.

There are no state-specific regulations on the duration of short-term health insurance in Kentucky, so the state defaults to federal regulations.¹

Until October 2, 2018, federal rules (implemented in 2017) limited short-term plans to three months in duration and prohibited renewals. But the Trump administration finalized regulations in 2018 that allowed insurers to offer short-term plans with initial terms up to 364 days and the option to renew for a total duration of up to 36 months, and Kentucky allows insurers to follow those guidelines.² Insurers may cap their short-term plans at shorter durations, however, and prohibit renewal if they choose to do so.

Soon after the new federal rules were finalized, the Kentucky Department of Insurance indicated that they were reviewing the new federal policy, and would “promulgate a regulation or recommend legislation if the Department determines changes to the federal regulatory requirements are necessary to protect Kentucky consumers.” But as of 2024, Kentucky has continued to allow short-term plan duration to follow the new federal guidelines in terms of length and optional renewability.

However, those federal limits will change in 2024 under new Biden administration rules for short-term health plans. Short-term plans issued or sold on or after September 1, 2024 will be limited to total durations of no more than four months, including renewals. Initial policy durations will be limited to no more than three months.

Short-term health insurance in Kentucky can be purchased by applicants who can meet the underwriting guidelines the insurers use.

Most short-term health plans can be purchased by people who are younger than 65 and who don’t have any of the medical conditions that would result in a declined application.³ But the specific eligibility rules and underwriting requirements vary from one insurance company to another.

Short-term health insurance plans generally will not cover pre-existing conditions, and they often use post-claims underwriting (meaning that they will go back through a person’s medical records after a claim is filed, to make sure it isn’t related to a pre-existing medical condition).⁴

Short-term health plans also generally exclude coverage for some of the ACA’s essential health benefits (most commonly, maternity care, prescription drugs, and mental health care),³ and impose dollar limits on the coverage they do provide. It’s important to double-check all of the plan information before purchasing a short-term policy, to make sure that you understand the limitations of the plan.

If you need health insurance coverage in Kentucky, first check to see if you’re eligible to enroll in an ACA-compliant major medical plan. Open enrollment for these plans runs from November 1 – January 15 (this enrollment window is used by Kynect, which is Kentucky’s marketplace/exchange, and also by health insurers that sell ACA-compliant coverage directly to consumers).

If you need to enroll in coverage outside of the open enrollment period, you may qualify for a special enrollment period if you experience a qualifying life event that will trigger a special enrollment period. This will allow you to buy a plan through the health insurance exchange in Kentucky (or outside the exchange, although subsidies aren’t available outside the exchange).

ACA-compliant plans are purchased on a month-to-month basis, so you can enroll in coverage even for only a few months until another policy takes effect. For example, if you’ll soon be enrolled in Medicare or an employer’s plan, you can sign up for an ACA-compliant plan during open enrollment or a special enrollment period, and then cancel it when your new plan is scheduled to take effect. And if you’re eligible for a premium subsidy and select a plan in the exchange, you can receive financial assistance with the cost even if you only need the plan for a few months (note that your eligibility for assistance is based on your total annual income, not just the income you had while you were enrolled in the plan through the exchange). The subsidies might make the monthly premiums much less costly than you were expecting; in many cases, even less costly than the price of a short-term medical plan.

Kentucky also expanded Medicaid eligibility under the Affordable Care Act, which means that adults age 19-64 with a household income of up to 138% of the poverty level can enroll in Medicaid, which has no premiums and very low out-of-pocket costs. Medicaid enrollment is available year-round. For 2024 coverage, a single adult can qualify for Medicaid with a total annual income of up to $20,782.

From Bowling Green to Louisville, there may be situations when short-term health insurance is the only option, or the most realistic option:

• You missed open enrollment for ACA-compliant coverage and do not have a qualifying event that would trigger a special enrollment period.
• You’re newly employed and the business has a waiting period of up to three months before new employees can enroll in the group’s healthcare plan. Once your employer starts to provide you with coverage, you can cancel the short-term health plan.
• You’ve signed up for an ACA-compliant plan (during open enrollment or a special enrollment period) but have to wait up to several weeks before the coverage takes effect.
• You’ll soon be enrolled in Medicare and need coverage to bridge the gap until your Medicare coverage takes effect.
• You’re not eligible for Medicaid or a premium subsidy for an ACA-compliant plan. Even with the American Rescue Plan’s expansion of premium subsidies (through 2025), there are still some people who don’t qualify for subsidies. They include people for whom the “family glitch” fix still doesn’t result in affordable coverage, as well as undocumented immigrants who are not eligible to enroll through the marketplace/exchange. (You do not need to be a U.S. citizen to enroll in a subsidized plan through the exchange, but you do need to be lawfully present in the U.S.)

The Kentucky Department of Insurance published Bulletin 2018-02 in October 2018, clarifying the state’s regulations for short-term health plans. The bulletin noted that the new federal rules were applicable in Kentucky, allowing short-term plans to have initial terms of up to 364 days and total duration, including renewals, of up to 36 months. The bulletin also reminded insurers that all short-term plans must include a disclosure to alert consumers of the fact that the coverage is not compliant with the ACA.

In terms of state-specific requirements, the bulletin notes that the state does still require insurance companies to file all rates and forms with the Department of Insurance, and comply with the state’s existing benefit mandates, which are detailed in this checklist.

The Kentucky Department of Insurance has also published a consumer alert with FAQs about short-term health insurance plans, and details regarding the potential limitations of these policies.

While Kentucky is not requiring short-term plans to be renewable, the Department of Insurance “strongly recommends” that insurers offering short-term plans “highlight” any details pertaining to renewability. Even under the extended duration rules that took effect in 2018, insurers have been able to sell plans that are not renewable. So Kentucky regulators want insurers to provide consumers with specific details about the renewability — or the lack thereof — of the plans they’re selling.

As noted above, stricter federal rules take effect for plans issued or sold starting in September 2024. Initial terms will be limited to no more than three months, and total duration will be limited to no more than four months.

The Kentucky Equal Justice Center submitted comments to HHS in March 2018, regarding the then-proposed expansion of short-term health plans. The letter recommended a few steps that states could take to protect consumers, including assessments on short-term insurers to fund reinsurance for the ACA-compliant individual market, requiring short-term plans to have minimum loss ratios, and requiring consumers to complete a Marketplace eligibility determination before being allowed to enroll in a short-term plan, to ensure that they understand all of their available options.

But the state did not move forward with implementing any of those recommendations, and Bulletin 2018-02 took a fairly hands-off approach to regulating short-term health insurance in Kentucky.