Availability of short-term health insurance in Michigan

Yes. At least five insurers were selling short-term health insurance plans in Michigan in July 2024, and one additional carrier had submitted rates and plans for review by state regulators.³

Short-term health insurance plans in Michigan are currently limited to no more than 185 days in duration with no renewal beyond that.

An applicant can purchase additional short-term plans but cannot have more than 185 days of short-term coverage from one insurer in any 365-day period.

The federal regulations that took effect in 2018 allowed for longer short-term plan durations but were clear in noting that states may continue to impose stricter rules.

So short-term health insurance plans in Michigan are limited to 185 days in duration, and applicants are limited to no more than 185 days of short-term coverage in a 365-day period. The Michigan Department of Insurance and Financial Services has confirmed this in an FAQ on their website² and in Bulletin 2018-20-INS.⁴

However, more restrictive federal rules were finalized in 2024. 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.

Michigan rules require short-term health insurers to issue their products “immediately, without underwriting, upon the receipt of a completed application.” However, the state’s rules clarify that these policies do not cover pre-existing conditions.⁴

So it’s possible the plans might use post-claims underwriting, which means that if a claim is filed, the carrier will go back through a person’s medical records to make sure it isn’t related to a pre-existing medical condition.⁵

Short-term health plans are not required to cover the ACA’s essential health benefits, and generally exclude coverage for maternity care, prescription drugs, substance use treatment, and mental health care.⁶ They also generally 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 Michigan, your first step should be to see whether you can sign up for an ACA-compliant major medical plan on HealthCare.gov.

ACA-compliant policies are available during open enrollment (November 1 to January 15) and anytime if you’re eligible for a special enrollment period. There are a variety of qualifying life events that will trigger a special enrollment period and allow you to buy a plan outside of open enrollment through the health insurance Marketplace.

These plans are purchased on a month-to-month basis, so you can enroll in one (with a premium subsidy if you’re eligible) even if you only need it for a few months before another policy takes effect.

But if you’re not eligible for a special enrollment period and you’re shopping outside of the annual open enrollment period, a short-term policy might be an option until you can sign up for an ACA-compliant plan.

But pay attention to considerations such as whether the plan covers outpatient prescription drugs (many short-term health insurance plans do not, but some do), and whether it imposes specific dollar limitations on services such as inpatient care, surgery, etc. (in addition to the plan’s overall benefit maximum).

There are times when enrolling in a short-term health insurance policy may be an affordable stopgap option, such as:

●     If you missed open enrollment for ACA-compliant coverage and are not eligible for a special enrollment period.

●     If you will soon qualify for Medicare and have no other coverage options in the meantime.

●     If you’re in a waiting period before becoming eligible for a new employer’s plan.

●     If you’ve enrolled in a Marketplace plan and are waiting for it to take effect.

If you’re not eligible for Medicaid or a premium subsidy in the exchange, an ACA-compliant plan might be unaffordable. Note that undocumented immigrants cannot purchase coverage through the exchange even at full price, nor can they enroll in Medicaid.

For an insurer that offers plans in the individual major medical market as well as the short-term market, Michigan statute only allows short-term plan premiums to account for up to 10% of the total individual market premiums the insurer (or its affiliate or parent company) collects.⁷

But most of the insurers that offer short-term health insurance plans in Michigan generally do not offer other individual market coverage, and the Michigan Department of Insurance and Financial Services confirmed that the no-more-than-10% rule does not apply to insurers that don’t offer regular individual major medical coverage in addition to short-term plans.