Short-Term Health Plans Sold Through Out-of-State Associations Threaten Consumer Protections

Emily Curran, Dania Palanker, Sabrina Corlette

The number of people buying short-term, limited-duration policies appears to have increased following the Trump administration’s move to extend the contract term of such policies to just under 12 months, up from three months. This extension has raised concerns that short-term policies may be deceptively marketed, with some sellers leading consumers to believe they are buying a comprehensive policy when they are not.

State insurance departments bear the primary responsibility for regulating short-term plans and protecting consumers. Twenty-four states have stricter limits on short-term plans than the federal floor and several more are trying to educate consumers to prevent abusive sales tactics.

However, states’ efforts may be undermined by a loophole that limits their ability to perform basic consumer protection functions. We reviewed brochures for the “best-selling” plan on offered by each short-term insurer in six states and found that many short-term plans are being sold through out-of-state associations that are exempt from state regulation.

To learn more about how these plans are skirting state regulation, read our recent post published by The Commonwealth Fund here.

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