Availability of short-term health insurance in California

No. California does not allow the sale of short-term health insurance plans.

Lawmakers in California passed a bill in 2018 (SB910) that prohibits the sale or renewal of short-term health insurance plans in California as of January 1, 2019. The legislation was sent to then-Governor Jerry Brown on August 21, 2018, and he signed it in late September. So short-term plans are no longer available for purchase or renewal anywhere in California.

The sale of other non-ACA-compliant plans – such as fixed indemnity products, critical illness plans, and health care sharing ministry plans – is still allowed, and these sorts of coverage are offered by a variety of companies. The monthly premiums for these plans tend to be less costly than ACA-compliant coverage for people who aren’t eligible for premium tax credits through Covered California (the health insurance exchange in California), but they also have a long list of drawbacks in terms of the limitations on the benefits and coverage they provide.

There were fewer than 10,000 short-term plans in effect in California at the end of 2017 – as opposed to 1.4 million people covered under ACA-compliant healthcare coverage purchased through Covered California. These plans were sometimes used to fill in gaps between other policies — in the months prior to enrolling in Medicare, for example, or just after a person became newly employed and was waiting for the new employer’s health plan to take effect.

Regulators in California addressed short-term plans – and their shortcomings – on several occasions. In October 2017, immediately after President Trump issued an executive order directing federal agencies to expand access to short-term plans, California Insurance Commissioner, Dave Jones, issued a press release stating that “increased sale of short-term policies that don’t cover essential health care needs or comply with most rules that apply to health insurance will harm consumers and create health insurance market instability.”

In February 2018, the Trump administration imposed new rules for short-term plans (essentially rolling back the restrictions that the Obama Administration had implemented). The new rules were finalized in August 2018.

However, those federal limits of that rule will change in 2024 under new Biden administration rules for short-term health plans. Short-term plans issued or sold on or after September 1, 2024 will be limited to total durations of no more than four months, including renewals.

But in April 2018, Commissioner Jones sent a letter to the Trump administration, calling the proposed expansion of short-term plans “an attack on the integrity of the nation’s health insurance markets.” Jones expressed his strong opposition to the proposed regulations, stating that “although touted as being an affordable alternative to ACA-compliant coverage, these [short-term] policies return us to a race to the bottom rather than providing a meaningful alternative.”

And ultimately, California decided to simply ban short-term healthcare plans altogether. Kaiser and Blue Shield of California were among the health insurers that supported SB910, calling for a ban on short-term health insurance in California. Notably, however, Anthem Blue Cross was the only major California health insurer to oppose the measure. None of those insurance companies directly offered short-term health insurance in 2018, but Anthem Blue Cross partnered with IHC to market short-term coverage in California prior to 2019.

Since short-term health plans are not available in California, we advise you to check whether you’re eligible for a special enrollment period which allows you to enroll in an ACA-compliant major medical plan. (If open enrollment is underway, you won’t need a special enrollment period; open enrollment in California runs from November 1 to January 31.)

Multiple qualifying life events can trigger a special enrollment period for you, thus allowing you to buy a plan through the health insurance marketplace in California. The marketplace plans are sold on a month-to-month basis, so you can enroll and use the coverage even if you only need a few months of coverage before another policy — like Medicare or an employer’s plan — takes effect. If you qualify for a special enrollment period, you can select from any of the plans that offer service in your area.

And if you’re eligible, you can get financial assistance via a premium subsidy. The subsidies can make ACA-compliant coverage much less costly — in some cases, even more affordable than short-term health insurance would have been if it were still available.

You may also qualify for cost-sharing reductions based on your income. And California offers additional state-funded cost-sharing subsidies that can help to keep out-of-pocket costs even lower, depending on your income and the Covered California plan you select.

Based on your income you may also qualify for health insurance in California under expanded Medicaid coverage (Medi-Cal). Medi-Cal is a government-run health program that provides coverage for nearly 14 million California residents.

California has expanded Medicaid eligibility under the ACA, to cover low-income adults under the age of 65.  You may qualify for Medi-Cal if you have a household income up to 133% of poverty (138% with the 5% income disregard; for a single adult in 2024, that amounts to $20,782 in annual income).

Yes. Since 2020, California residents have been required by law to have qualifying health insurance coverage (ie, minimum essential coverage) or pay a penalty when filing a state tax return. Some residents can get an exemption from the coverage requirement, depending on their circumstances.

The penalty for not having health coverage for an entire year is at least $850 per adult and $425 per dependent child under 18.

Short-term health insurance is not available in California, but it would not have fulfilled the state’s health insurance requirement even if it had continued to be available.