Short-term health plans in Tennessee
- Short-term health insurance in Tennessee can have an initial term of up to 364 days and total duration of up to 36 months.
- Tennessee has rate and form filing requirements for short-term plans.
- Several sections of Tennessee insurance statute apply to short-term plans.
- Tennessee’s Tri-City area has the highest rate of pre-existing conditions in the nation – and short-term plans don’t cover pre-existing conditions.
- At least five insurers offer short-term plans in Tennessee.
Tennessee’s short-term healthcare insurance regulations
Insurers that offer short-term plans in Tennessee are required to file the rates and plans with the Tennessee Department of Commerce and Insurance, and there are specific state rules that apply to rate and form filing in Tennessee for plans that aren’t subject to ACA (Obamacare) regulations (including short-term health plans).
Several sections of Tennessee insurance statute (Title 56) apply to short-term plans sold in the state, including:
- 56-7-2301 – 2368, Mandated Insurer or Plan Coverage
- 56-7-2401 – 2410, Mandated Scope of Practice
- 56-7-2501 – 2508, Mandated Insurer or Plan Options
- 56-7-2601 – 2606, Mandated Offerings of Coverage
Short-term plan duration in Tennessee
Tennessee does not limit the duration of short-term health insurance plans, so the state defaults to the federal rules. The Trump administration finalized regulations in 2018 that allow short-term medical plans to have initial terms of up to 364 days, and total duration, including renewals, of up to 36 months.
But insurers can impose shorter maximum terms and can opt not to allow renewals. Some of the insurers that offer short-term health insurance in Tennessee allow consumers to buy up to 36 months of coverage, while others cap their plans at six months.
National Association of Insurance Commissioners supports expansion of short-term plans
Until mid-2019, Julie Mix McPeak served as the insurance commissioner for Tennessee. McPeak was also the president of the National Association of Insurance Commissioners (NAIC) when the NAIC submitted a letter to HHS that was generally supportive of the then-proposed rule change to expand access to short-term health insurance plans. In particular, the NAIC supported the provision to allow short-term plans to have initial terms of up to 364 days, instead of the three-month limit that was imposed under a regulation finalized by the Obama administration in 2016.
McPeak expressed support for the expansion of short-term plans, while also noting how important it is for consumers to understand the benefits covered by the plan they are considering and how short-term healthcare insurance plans differ from ACA-compliant plans.
It’s noteworthy that Northeastern Tennessee’s Tri-Cities has the highest rate of pre-existing conditions in the United States: 41 percent of adults in the area have health conditions that would have prevented them from buying individual-market health insurance prior to 2014 (when the ACA reformed that market and banned medical underwriting). But short-term health insurance plans still use medical underwriting, and the policies generally do not cover pre-existing conditions. Excluding coverage for pre-existing conditions can make a short-term policy appear more affordable than an ACA-compliant or Obamacare policy.
Which insurance companies offer short-term health insurance in Tennessee?
As of mid-2020, there were at least five providers of short-term health insurance in Tennessee:
- Companion Life
- Everest Reinsurance
- Independence American Insurance Company
- National General
- UnitedHealthcare/Golden Rule
Another insurer, United States Fire Insurance Company, filed plans in late 2019 for a new short-term product, but the filing was withdrawn in 2020 (see SERFF filing number CRUM-132087302; the filing notes include numerous details from the Tennessee Department of Commerce and Insurance regarding specific requirements that the Department enforces for short-term health insurance plans).
Who can get short-term health insurance in Tennessee?
Short-term health insurance plans can be purchased in Tennessee by applicants who meet the underwriting guidelines the insurers use. 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 medical insurance plans typically include blanket exclusions for pre-existing conditions, so they are not adequate or affordable (due to the cost of monthly premiums and other out-of-pocket costs) for someone in the Volunteer State who is in need of ongoing medical care.
If you’re in need of health insurance coverage in Tennessee, 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 Tennessee. 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’re only going to need it for a few months before another policy takes effect.
Before you sign up for a short-term plan, make sure you understand the specific healthcare benefits the plan will provide. For example, most short-term health insurance plans do not cover outpatient prescription drugs. Some do include prescriptions in their covered benefits, but you’ll want to make sure that you’re not mistaking a prescription discount plan for real prescription benefits.
You’ll also want to understand whether the plan imposes specific dollar limitations on healthcare services such as inpatient hospital stays, surgery, etc. (in addition to the plan’s overall benefit maximum).
When should I consider short-term health insurance in Tennessee?
From Knoxville to Memphis, there are times when short-term health insurance might be the only option available, such as:
- If you missed open enrollment for ACA-compliant coverage and do not have a qualifying event that would trigger a special enrollment period.
- 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:
- Those who earn 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.)
- Those who earn less than the poverty level in states that haven’t expanded Medicaid (Tennessee has not expanded Medicaid).
- People ensnared by the ACA’s family glitch.
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.