Short-term health insurance in New Mexico

New Mexico’s short-term health insurance regulations

In January 2019, HB285 was introduced by Rep. Micaela Cadena (D, 33rd District) in an effort to much more closely regulate short-term plans in New Mexico. The legislation passed with unanimous support in both the House and Senate, and was signed into law by Governor Lujan Grisham in March 2019.

HB285 includes the same durational and sales limits that the state has already implemented via regulation, described below (ie, the plans must be nonrenewable and have terms of no more than three months), but it goes further than that. The legislation also gives OSI the authority to regulate a wide range of provisions related to short-term plans, including minimum loss ratios and minimum standards as far as benefits that the plans must provide, including state-mandated benefits.

Short-term health plan duration in New Mexico

Amended regulations, effective February 1, 2019, define short-term health insurance in New Mexico as nonrenewable, and with terms of no more than three months. The regulations also prohibit insurers from selling a short-term plan to anyone who has had short-term coverage within the previous 12 months.

The Trump administration began allowing short-term health insurance plans to be offered with extended durations as of October 2, 2018, unless a state had its own restrictions. At that point, New Mexico did not yet have its own limits on short-term plans. So for a few months, short-term plans with initial terms of up to a year were available for purchase in the state.

But in September 2018, the New Mexico Office of the Superintendent of Insurance (OSI) and Health Action NM (an advocacy group for universal access to health care) presented details about potential state actions to stabilize the individual market. OSI has the authority to regulate some aspects of the plans, including maximum short-term plan duration, but they noted that legislation would be needed for other changes, including minimum loss ratios and benefit mandates.

The new rules took effect at the beginning of February 2019, but 12-month short-term plans were still for sale at that point via various online brokerages. The New Mexico Office of the Superintended of Insurance (OSI) confirmed that while the new rules for short-term plans did take effect in February, there were still plans for sale that were approved prior to that date, and those could continue to be sold under their already-approved terms. But any new plans that are submitted to state regulators for approval were required have term limits of no more than three months and be non-renewable. And OSI clarified in April 2019 that insurers had to immediately stop selling non-compliant short-term plans. Any such plans that had already been sold had to terminate no later than December 31, 2019.

By mid-2019, a search of various online brokerages indicated there was no short-term health insurance in New Mexico being sold. There are other states, including California, Colorado, and Hawaii, where regulations for short-term medical plans have been strengthened since 2018 and insurers have since abandoned the short-term market.

Which insurers offer short-term plans in New Mexico?

The New Mexico Office of the Superintendent of Insurance has confirmed, in a bulletin related to HB285 implementation, that while compliant short-term health plans may continue to be sold, they cannot be renewed. But as noted above, there do not appear to be any short-term plans for sale in the state, and that’s been the case since mid-2019.

National General still offered short-term health insurance in New Mexico as of March 2019, and at that point, their plans were still available with initial terms of up to a year. As noted above, this was because those plans were approved by the state prior to the effective date of the state’s new rules for short-term plans, and the state stopped allowing those plans to be sold as of April 2019. By mid-2019, National General’s plans were no longer available.

Blue Cross Blue Shield of New Mexico was offering short-term medical plans as of early 2019, but the insurer’s sales department confirmed in March 2019 that short-term plans were no longer for sale.

Who can get short-term health insurance in New Mexico, and when should I consider it?

Since short-term health plans are not currently available in New Mexico, we advise you to check to see if you can purchase an ACA-compliant major medical plan instead. These plans will cover all of the ACA’s essential health benefits, and will also cover pre-existing conditions.

Open enrollment for these plans, both on-exchange (through HealthCare.gov) and off-exchange (directly from a health insurance company), runs from November 1 to December 15, with coverage effective January 1. If you’re looking for coverage outside of the open enrollment window, you may be eligible for a special enrollment period if you experience a qualifying life event.

ACCA-compliant plans (ie, Obamacare plans) are purchased on a month-to-month basis, so you can enroll in a plan even if you only need coverage for a few months before another policy takes effect. So if you’ll soon be enrolled in Medicare or you’re newly employed and will be covered by your employer’s plan after a waiting period, you can still sign up for an ACA-compliant plan during open enrollment or a special enrollment period, and then cancel it when your new plan takes effect. And if your household income is in the eligible range, you can get a premium subsidy that will offset some or all of the monthly premium, making ACA-compliant coverage much less costly than it would otherwise be.

Depending on your household income, you may also qualify for health insurance in New Mexico under expanded Medicaid coverage. When the Affordable Care Act was enacted in 2010, Medicaid expansion was a cornerstone of lawmakers’ efforts to expand realistic access to healthcare to as many people as possible. If you have a household income up to 133 percent of poverty (138 percent with the 5 percent income disregard) would be able to enroll in Medicaid. Expanded Medicaid guidelines only apply to adults up to age 64. After that, most people are eligible for Medicare. But for Medicare beneficiaries with limited financial means, New Mexico Medicaid can provide additional financial assistance with monthly premiums and out-of-pocket costs.

If you’re ineligible for Medicaid or a premium subsidy and cannot afford an ACA-compliant plan or do not have a qualifying event that would allow you to enroll in one, you may be able to find various other options available in your area that you could use until you’re able to enroll in real health coverage. These include health care sharing ministries, direct primary care plans, and fixed indemnity plans. All of these types of coverage have significant limitations and drawbacks, however, and you’ll want to make sure you understand all of the details and limitations before purchasing one of them.

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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.