Is Your Life in Transition?  Short term health insurance plans may just be the right fit for you.

The Trump Administration delivers on promise of more affordable health insurance options.  On Wednesday August 1st, 2018, 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.  This new CMS rule applies to short term health insurance plans.

The new CMS 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 will help increase choices for Americans faced with escalating premiums and dwindling options in the individual insurance market.

“Under the Affordable Care Act, Americans have seen insurance premiums rise and choices dwindle,” said Health and Human Services Secretary Alex Azar. “President Trump is bringing more affordable insurance options back to the market, including through allowing the renewal of short-term plans. These plans aren’t for everyone, but they can provide a much more affordable option for millions of the forgotten men and women left out by the current system.”

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 approaching age 65 and will be Medicare-eligible soon and needs coverage to bridge the “gap” to Medicare
• that is between jobs, or a student taking time off from school
• or a middle-class family without access to subsidized ACA plans
• that is temporarily unemployed – a short term health plan can serve as a COBRA alternative

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.

When does this new rule take effect?  The rule states 60 days after the date of the publication of the new rule, so as of today, around October 2018.