Buying short-term health plans in Washington State
- Washington now officially limits the duration of short-term plans to three months. No insurers were offering short-term plans in the state as of early 2019, but LifeMap’s policies for 2020 coverage will be available for purchase after December 15, 2019.
- Even prior to 2019, the only plans available in the state were already limited to no more than three months in duration.
- There were no insurers offering short-term plans in Washington as of early 2019, but one is offering plans as of late 2019. (Only one insurer offered plans in 2018, and they suspended sales temporarily in order to bring their products into compliance with new rules.)
- New 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.
- As of 2019, short-term plans cannot be sold 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 limit the lookback period for pre-existing conditions to 24 months.
Duration limits for short-term plans in Washington State
Washington insurance regulators implemented new rules for short-term health insurance plans, which took effect in January 2019. The new rules limit the plans to no more than three months in duration and prohibit renewals. Previously, the duration of short-term plans 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.
As of early 2019, no insurers were selling short-term plans in Washington, but LifeMap resumed sales as of April 2019 (but plans cannot be purchased for January 2020 until after December 15, 2019)
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.
New regulations limit short-term plans
The new federal regulations 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.
The new regulations, which took effect in January 2019, include the following provisions:
- 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 (ie, 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 open enrollment, 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).
LifeMap plans available, but not during ACA open enrollment with a January effective date
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 is not accepting applications for January 2020 effective dates that are submitted between November 1 and December 15, 2019. Starting December 16, 2019, applicants will be able to submit applications for LifeMap’s short-term plans with January 2020 effective dates.
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.