Availability of short-term health insurance in Montana

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

Montana does not limit the duration of short-term health plans, so federal duration limits are applicable. Although short-term health insurance in Montana can thus have initial terms of up to 364 days (for policies issued before September 2024) the insurers that offer short-term plans in Montana all currently cap their plan terms at six months, and do not offer longer-term plans.

During the 2019 legislative session, Representative Tom Winter (D, Missoula) introduced H.B.503, which would have limited short-term plan duration to three months. But the legislation did not pass, and Montana continues to defer to the federal duration limits for short-term health insurance.

Those federal limits are changing 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 terms will be capped at no more than three months.

Most short-term health plans can be purchased by people who are younger than 65 and who do not have any of the short list of medical conditions that will result in a declined application.¹ But the specific eligibility requirements vary from one insurance company to another.

Short-term health insurance plans tend to exclude coverage for 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).²

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 They also tend to impose dollar limits on their coverage. 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 Montana, you’ll want to first check to see if you can enroll in an ACA-compliant major medical plan (ie, an Obamacare plan).

These plans are available during the annual open enrollment period in the fall (November 1 – January 15), and can be purchased through Montana’s federally-run exchange/marketplace — HealthCare.gov — or directly from one of the health insurance companies that offer policies in the state (premium subsidies and cost-sharing subsidies are only available if you buy your plan through the exchange).

If you’re trying to enroll outside of the open enrollment window, you may be eligible for a special enrollment period if you experience a qualifying life event. And there is an ongoing special enrollment period that allows subsidy-eligible applicants to enroll in a plan through the exchange at any time if their household income doesn’t exceed 150% of the poverty level.

ACA-compliant plans are purchased on a month-to-month basis, so you can enroll even if you need coverage for a few months before another policy takes effect. For example, if you’ll soon be enrolled in Medicare or an employer’s plan, you can sign up for a Marketplace plan (assuming it’s during open enrollment or you qualify for a special enrollment period) and then schedule your Marketplace plan to end when your new coverage starts.

There may be situations when you find short-term health insurance as the only realistic option, for example:

• If you missed open enrollment for ACA-compliant coverage and lack a qualifying event that would trigger a special enrollment period.
• If you’re newly employed and the business has a waiting period of up to three months before you can enroll in the employer-sponsored group healthcare plan (and you’re not eligible to enroll in an ACA-compliant plan or keep another employer’s plan via COBRA/state continuation)
• If you’ll soon be eligible for Medicare and don’t have access to any other coverage before then. You can use a short-term plan to bridge the gap, although it’s recommended that you enroll in an ACA-compliant plan if an enrollment opportunity presents itself before your Medicare coverage takes effect (you’ll be able to cancel the plan when your Medicare begins).
• If you’ve already enrolled in an ACA-compliant plan or an employer’s plan, but have to wait several weeks before the coverage takes effect and need just-in-case coverage in the meantime.
• If you’re not eligible for Medicaid or a premium subsidy in the exchange, the monthly premiums for an ACA-compliant plan might be unaffordable.

Montana published guidance in 2018, clarifying that the state was deferring to federal rules for short-term health insurance plans. The state also published a series of FAQs about short-term health insurance in Montana, including details about state-mandated benefits and state regulations that apply to short-term plans. (These resources are no longer available on the Montana Commissioner of Securities & Insurance website.)

From 2009 to 2016, Monica Lindeen was the Commissioner of Securities and Insurance in Montana. Lindeen, a Democrat, was term-limited in 2016 and could not seek re-election that year. Matt Rosendale, a Republican, won the election in 2016 and assumed office as the Commissioner at the start of 2017.

Rosendale ran unsuccessfully to unseat Senator Jon Tester, a Democrat, in the 2018 election; Rosendale lost that race, so he continued to be Montana’s Insurance Commissioner. But in the 2020 election, Rosendale successfully ran for Montana’s at-large House of Representatives seat. Another Republican, Troy Downing, won the 2020 election to be Montana’s next Commissioner of Securities and Insurance.

Rosendale and Downing have similar approaches to health care reform and short-term health insurance, but it differs sharply from the approach taken by their predecessor. Lindeen’s office warned consumers early in 2016 about the limitation and potential shortcomings of short-term health insurance, while Rosendale has been much more open to the idea of short-term plans, and Downing has called them “another tool in toolbox… not right for everybody, but it is right for some people.”

Lindeen’s office took action against several short-term health insurers and insurance producers in 2016, alleging that they had sold short-term plans to Montana residents without adequate licensing, and without communicating the fact that these plans didn’t cover pre-existing conditions, didn’t count as health insurance in terms of avoiding the individual mandate penalty (which applied from 2014 through 2018, and was assessed on people who were enrolled in short-term health plans) and could not be considered comprehensive coverage.

The issue was resolved with an agreement (finalized three days after Rosendale took over as Commissioner) that refunds would be offered to residents who had purchased the policies in question.

Rosendale’s office subsequently secured nearly $285,000 in restitution that could be paid to as many as 3,645 policyholders in Montana, although people had to demonstrate that they were misled by one of the insurers or agents deceptively marketing short-term plans between 2012 and 2016. The primary insurer in the case was Health Insurance Innovations, but several other insurers and individuals paid into the restitution fund, and Commissioner Rosendale sent letters to the 3,645 people who were identified by his office as possibly having been misled by one of them. There was a form included with the letter that people had to fill out to claim restitution funds, and it had to be returned to Rosendale’s office by November 9, 2019.

Early in the COVID pandemic, Rosendale included short-term plans in his summary of year-round coverage options for Montana residents (and listed both short-term plans and direct primary care plans above ACA-compliant plans purchased during a special enrollment period triggered by a qualifying event).