HHS final rule on short-term, limited-duration insurance brings more flexibility and choices to consumers
The departments of Health and Human Services, Labor, and the Treasury issued a final rule to help Americans struggling to afford health coverage find new, more affordable options. The rule allows for the sale and renewal of short-term, limited-duration plans that cover longer periods than the previous maximum period of less than three months. Such coverage can now cover an initial period of less than 12 months, and, taking into account any extensions, a maximum duration of no longer than 36 months in total.
This action may help increase choices for Americans faced with escalating premiums and dwindling options in the individual insurance market.
In a recent release of three reports on the current state of the individual insurance market, Centers for Medicare & Medicaid Services (CMS) data reveal serious problems. While enrollment data show stable enrollment for subsidized exchange coverage, the number of people enrolled in the individual market without subsidies declined by an alarming 20% nationally in 2017, while at the same time premiums rose by 21%.
Many state markets experienced far more dramatic declines, with unsubsidized enrollment dropping by more than 40% in six states, including a 73% decline in Arizona.
Short-term, limited-duration insurance, which is not required to comply with federal market requirements governing individual health insurance coverage, can provide coverage for people transitioning between different coverage options, such as an individual who is between jobs, or a student taking time off from school, as well as for middle-class families without access to subsidized ACA plans. Access to these plans has become increasingly important as premiums have escalated for individual market plans, and affordable choices for individuals and families have dwindled.
The average monthly premium for an individual in the fourth quarter of 2016 for a short-term, limited-duration policy was approximately $124, compared with $393 for an unsubsidized individual market plan.
The final rule can be found here: https://www.hhs.gov/sites/default/files/CMS-9924-F-STLDI-Final-Rule.pdf
A fact sheet on today’s proposed rule can be found here: https://www.hhs.gov/sites/default/files/FS-Short-Term-Limited-Duration-Insurance-Proposed-Rule.pdf
