Frequently asked questions about
short-term health insurance 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 (as described in the next section, the necessary legislation was enacted in March 2019, strengthening the state’s regulatory approach).
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.
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 January 15. 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.
ACA-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 depending on your household income, you may be able to qualify for 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.
Also depending on your household income, you may find that you 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 138% of the federal poverty level, you may 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 are generally not recommended as stand-alone health coverage. You’ll want to make sure you understand all of the details and limitations before purchasing one of them.
