Short-term health plans in Washington State
- Washington officially limits the duration of short-term plans to three months.
- Only one insurer offers short-term health plans in Washington.
- State regulations prohibit renewals and prevent the sale of a short-term plan to anyone who has had three months of short-term coverage in the past 12 months.
- Short-term insurance plans cannot be sold in Washington during the individual market open enrollment period if they have an effective date in the upcoming year (to avoid confusion with ACA-compliant plans).
- New regulations for short-term health plans in Washington State limit the lookback period for pre-existing conditions to 24 months.
LifeMap resumed sales of short-term plans in 2019, but sales are restricted during the open enrollment period for ACA-compliant plans
LifeMap was the only insurer selling short-term plans in Washington in 2018, and they suspended sales as of mid-November 2018, with the suspension scheduled to last “until [they] can bring the product into compliance with the updated regulations.”
The Washington Office of the Insurance Commissioner confirmed that as of early 2019, there were no short-term health insurance plans for sale in Washington state.
But LifeMap’s sales resumed in mid-April 2019, with the changes necessary to comply with the state’s new rules.
Washington State’s short-term health insurance regulations
The federal regulations implemented by the Trump administration in 2018 are clear in noting that states may impose tighter regulations. And Washington’s insurance commissioner, Mike Kriedler, who has called short-term plans “a poor solution for consumers,” announced in March 2018 that his office would begin the process of rule-making to define short-term plans at the state level.
An outline of the proposed regulations was published in June 2018. The official draft regulation notice was published on August 21, 2018, and public comments were accepted until September 24, 2018.
The rule was officially adopted in October 2018. It was adopted as proposed, except the rule requiring 20 days’ notice before a rescission or cancellation was adjusted for circumstances in which there are fewer than 20 days remaining in the plan’s duration.
- Short-term plans are limited to three months in duration with no renewals allowed.
- Insurers are prevented from selling short-term plans to an applicant who had already had three months of short-term coverage in the prior 12 months.
- Short-term plans are required to cover a list of basic inpatient, outpatient, and surgical services.
- Short-term plans must continue coverage (with no additional premiums) if the insured is hospitalized on the date that the short-term plan would otherwise have ended. The extension of coverage would last until the patient is discharged from the hospital.
- The lookback period for pre-existing conditions is limited to no more than 24 months (i.e., a pre-existing condition that hadn’t had symptoms or treatment for more than 24 months cannot be excluded).
- A short-term insurer must offer at least one plan with a per-person deductible of $2,000 or lower.
- The sale of short-term plans is banned during the open enrollment window that applies to ACA-compliant plans, if the short-term coverage is to take effect in January. So short-term plans can’t be sold in direct competition with ACA-compliant plans during open enrollment. State regulators noted that this is to help avoid confusion for consumers, since short-term plans purchased during open enrollment would take effect before the start of the new year, whereas ACA-compliant plans sold during open enrollment would take effect January 1 of the coming year (open enrollment for ACA-compliant plans in the individual market runs from November 1 to December 15).
Short-term plan duration in Washington State
Washington insurance regulators implemented new rules for short-term health insurance in Washington State, which took effect in January 2019. The new rules limit the short-term plan duration to no more than three months in length and prohibit renewals. Previously, the duration of short-term coverage in Washington State was not restricted beyond federal regulations, although such plans had to officially be determined to be short-term limited-duration plans by the Insurance Commissioner and approved prior to being offered for sale. [See RCW 48.43.005 (26)(l).]
Until October 2, 2018, federal regulations limited short-term health plans to no more than three months, and renewals were prohibited. But the Trump administration’s rules for short-term plans (effective October 2, 2018) allow them to have initial terms of up to 364 days, and total duration (including renewals) of up to 36 months.
Although the federal rules changed on October 2, 2018, and Washington’s new rules didn’t take effect until January 2019, the Office of the Insurance Commissioner confirmed that LifeMap, the only insurer selling short-term plans in Washington in 2018, did not submit filings for any longer-term short-term plans to be sold in the final quarter of 2018. So although longer short-term plans were allowed under federal rules in late 2018 and were not banned under state rules until 2019, the only plans available in Washington in 2018 were limited to three months in duration.
Which insurers offer short-term plans in Washington State?
After suspending enrollments for several months, LifeMap began offering coverage again in Washington in April 2019. But under the terms of the state’s new rules, short-term plans with January effective dates cannot be sold between November 1 and December 15 (the open enrollment period for ACA-compliant plans). So LifeMap does not accept applications for January effective dates that are submitted between November 1 and December 15.
Applications for short-term coverage can be submitted prior to November 1. And starting on December 16, applicants will be able to submit applications for LifeMap’s short-term plans with January 2021 effective dates.
We are not aware of any other insurance companies that currently provide short-term health insurance in Washington.
Who can get short-term health insurance in Washington State?
Short-term health insurance in Washington can be purchased by applicants who can meet the medical underwriting guidelines that LifeMap uses. In general, this means being under 65 years old 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 Evergreen State who have a chronic condition.
If you’re in need of health insurance coverage in Washington, first check to see if you’re eligible for a special enrollment period so you can enroll in an ACA-compliant major medical plan. A variety of qualifying life events will trigger a special enrollment period and allow you to buy an ACA-compliant plan through Washington Healthplanfinder (the health insurance exchange in Washington). These plans are purchased on a monthly basis, so you can enroll in coverage even for only a few months until another policy takes effect — and if you’re eligible, you may qualify for financial assistance in the form of a premium subsidy.
Should I consider short-term health insurance in Washington State?
Before you sign up for a short-term plan, make sure you understand the specific healthcare benefits the plan will provide. Short-term plans typically exclude whole categories of coverage that are covered by ACA-compliant plans. 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.
Further, short-term plans typically exclude coverage for pre-existing conditions, which can make short-term policies appear more affordable than ACA-compliant policies. However, that upfront affordability can quickly be wiped out by costly out-of-pocket charges (like deductibles, copayments, or co-insurance) or any expenses related to a condition that is not covered by the short-term policy.
Despite all of these precautions, there may be situations where it makes sense to use a short-term plan, 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 are newly employed and have a waiting period until you can be covered by your new employer’s health insurance plan; short-term insurance may provide a much more affordable (but less comprehensive) stopgap than COBRA or an ACA-compliant plan.
- If you will soon be eligible for Medicare.
- If you’re not eligible for Medicaid or a premium subsidy in the exchange, an ACA-compliant plan might be unaffordable. Some examples of who are ineligible for premium subsidies:
- Folks who earn more than 400% of the poverty level (for 2021 coverage, that amounts to $51,040 for a single person; if your ACA-specific modified adjusted gross income is slightly above the subsidy-eligible threshold, there are steps you can take to reduce it).
- People caught in the ACA’s family glitch.
Regardless of the circumstances, you’ll only be able to be enrolled in a short-term plan for a maximum of three months within any given 12-month period, so short-term plans do not provide an affordable or long-lasting substitute for regular healthcare insurance.
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.