Short-term health insurance in Michigan

Michigan short-term health insurance regulations

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 percent of the total individual market premiums the insurer (or its affiliate or parent company) collects.

But 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.

Michigan’s short-term health insurance legislation

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.

Short-term plan duration 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 Trump administration’s new regulations allow for longer short-term plan duration, 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.

Which insurers offer short-term health insurance in Michigan?

As of mid-2020, there were at least five insurers that provide short-term insurance policies Michigan:

• Companion Life
• Independence American Insurance Company (IHC)
• National General
• Priority Health
• United Healthcare (Golden Rule)

Who can get short-term health insurance in Michigan?

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 Kansas 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 (most 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).

When should I consider short-term health insurance in Michigan?

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.
• 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:

• Americans earning more than 400% of the poverty level. (For 2021 coverage, that’s $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 trapped by the ACA’s family glitch.

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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.