Availability of short-term health insurance in Michigan

Yes. As of 2022, there were at least six insurers offering short-term health insurance in Michigan.

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

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 allow for longer short-term plan durations, but are 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 website and in Bulletin 2018-20-INS.

As of 2022, there were at least six insurers offering short-term insurance policies in Michigan:

• Companion Life
• Independence American Insurance Company (IHC)
• National General
• Priority Health
• The North River Insurance Company
• UnitedHealthcare (Golden Rule)

An insurer that also sells individual major medical coverage can’t have more than 10% of its total individual market premiums attributed to short-term plans. Priority Health and UnitedHealthcare both offer individual major medical coverage through Michigan’s exchange. But the rest of the state’s short-term insurers do not offer individual major medical coverage. 

Short-term health insurance in Michigan can be purchased by residents (individuals or families) who meet the underwriting guidelines of insurers. In general, this means being under 65 years old (some insurers put the age limit at 64 years) and in fairly good health.

Short-term health plans typically include blanket exclusions for pre-existing conditions, so they are not adequate for residents of the Wolverine State who need certain medical care and seeking a short-term policy that will cover those needs. Excluding coverage for pre-existing conditions can make short-term policies appear more affordable than ACA-compliant (Obamacare) policies. However, that upfront affordability disappears if you end up paying out of pocket for healthcare services related to an uncovered condition.

If you’re in need of health insurance coverage in Michigan, your first step should be to see whether you’re eligible for a special enrollment period that would allow you to enroll in an ACA-compliant major medical plan. There are a variety of qualifying life events that will trigger a special enrollment period and allow you to buy a plan through the health insurance exchange in Michigan. 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.

An agent or broker can provide information on coverage options and costs for short-term health insurance in Michigan and determine which will policies best fit your needs. Some things to keep in mind are the allowable plan durations (some insurers cap their plans at shorter durations than the maximum the state allows), whether the insurer offers guaranteed renewability, and the specific benefits the plan covers.

Pay attention to things 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 lack a qualifying event to trigger a special enrollment period.
• If you will soon qualify for Medicare and have no other coverage options in the meantime.
• If you’re not eligible for Medicaid or a premium subsidy in the exchange, an ACA-compliant plan might be unaffordable. 

People who are ineligible for premium subsidies include:

• People whose income is too high to be subsidy-eligible. For several years, there was a hard cutoff on subsidy eligibility at 400% of the poverty level. The American Rescue Plan eliminated this for 2021 and 2022, although Congress would have to take action to extend that provision into 2023 and future years. If they don’t, the “subsidy cliff” will return. 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 trapped by the ACA’s family glitch (note that this is expected to be fixed as of 2023, but not all affected families will qualify for subsidies under the new rules).
• Undocumented immigrants, who cannot purchase coverage through the exchange at all, even at full price. 

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.

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. (Two insurers — Priority Health and UnitedHealthcare — offer short-term plans as well as individual major medical coverage in Michigan.)

Michigan’s GOP legislature was engaged in an intensive lame-duck session in late 2018, anticipating the incoming Democratic wave in the state. One of the bills introduced in December 2018, SB1224, would have greatly relaxed Michigan’s short-term health insurance rules. Ultimately, the bill did not make it to a vote, so it was unsuccessful. But here’s what GOP lawmakers in Michigan were hoping to accomplish:

• • SB1224 would have allowed short-term plans to last up to a year and be renewable.
  • It would have allowed them to cover pre-existing conditions but would not have required them to do so (most wouldn’t, as that’s a key part of their business strategy; current statute in Michigan does not allow short-term plans to cover pre-existing conditions).
  • It would have required short-term plans to cover some essential health benefits: emergency care, hospital services, physician services, lab work, and x-rays. But no other essential health benefit coverage would have been required. Incidentally, those listed benefits are the ones that short-term plans already tend to cover. The ones they often don’t cover, including maternity care, prescription drugs, and mental health care, would have continued to not be required.
  • Short-term plans would have had to include a 10-day free-look period. This is an industry standard in most states, but Michigan’s law does not currently require it for short-term coverage.