States Step Up to Protect Insurance Markets and Consumers from Short-Term Health Plans

Dania Palanker, Maanasa Kona, Emily Curran

Short-term, limited duration health insurance — known as short-term plans — was originally intended to fill short gaps when people transitioned between coverage, but is now being sold as a replacement for year-round comprehensive coverage. Short-term plans are not subject to the consumer protections of the Affordable Care Act. As a result, they have numerous gaps and limits in their benefit design, and people with these plans can be denied coverage for certain conditions. To protect consumers from these risks, some states have taken steps to regulate short-term plans.

To better understand emerging trends in regulation of the short-term market, we reviewed state laws and regulations governing short-term plans, and conducted structured interviews with policymakers and stakeholders in nine states and D.C.

We found that some states took steps in 2018 to ban or limit short-term plans and to increase the value of these products. State action aimed to protect consumers from products offering inadequate coverage and misinformation while safeguarding the individual health insurance market. New laws were passed with bipartisan backing and with support from consumer and patient advocates and health insurers.

To learn more about our findings and state regulation of short-term plans, read our brief at The Commonwealth Fund.

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