Learn about short-term health insurance in Delaware.
Availability of short-term health insurance in Delaware
Delaware regulations limit the duration of temporary health insurance plans to three months
Since December 2018, state regulations have limited short-term health insurance in Delaware to three months. Short-term plans cannot be renewed or extended, and an insurer cannot issue a new policy to the same applicant more than once in a year. Successive back-to-back plans are also prohibited. Also, short-term health insurance in Delaware must have loss ratios of at least 60%.
Several insurers stopped selling short-term coverage in late 2018, but had rejoined the state’s market under the new rules by mid-2019. As of 2024, there is at least one insurer offering short-term plans in the state.
New federal rules take effect for policies sold or issued starting in September 2024, limiting them to three-month terms and total duration, including renewals, of no more than four months. But states can still have stricter rules, which Delaware does. So Delaware will continue to limit the total duration of a short-term policy to no more than three months.
Frequently asked questions about short-term health insurance in Delaware
Is short-term health insurance available for purchase in Delaware?
Yes. At least one insurer offers short-term health insurance in Delaware, with a total duration of up to three months.
Which short-term plan durations are permitted under Delaware rules?
The state’s regulations, effective December 2018 (and now permanently in force), limit short-term plans to three months and prohibit renewals. Insurers are also not allowed to offer successive back-to-back short-term plans to the same policyholder, and a new short-term plan can’t be sold to the same person more than once in a given year.
Who can buy short-term health insurance in Delaware?
Short-term health insurance in Delaware can be purchased by residents who meet the underwriting guidelines of insurers. This generally means being under 65 years old and not having a medical condition that will result in a declined application.1 But the specific requirements are set by the insurance company that offers the coverage.
Short-term health insurance plans usually include blanket exclusions for pre-existing conditions, and they often use post-claims underwriting (meaning that they will go back through a person’s medical records after a claim is filed, to make sure it isn’t related to a pre-existing medical condition).2
Short-term health plans also generally exclude coverage for some of the ACA’s essential health benefits (most commonly, maternity care, prescription drugs, and mental health care),1 and impose dollar limits on the coverage they do provide.
So it’s important to read all of the plan details before purchasing a short-term policy, to make sure that you understand the limitations of the plan.
If you need health insurance in Delaware, check first to see if you can enroll in an ACA-compliant major medical plan. Open enrollment for these plans runs from November 1 to January 15 each year; during this window, nearly anyone can purchase an individual/family plan. You can go to HealthCare.gov to buy these plans.
Outside the open enrollment window, you may be eligible for a special enrollment period that would allow you to enroll in an ACA-compliant plan. Most special enrollment periods are linked to specific qualifying life events.
(Some special enrollment periods, such as the low-income SEP and the AI/AN SEP, do not require a specific life event for eligibility.)
During open enrollment or a special enrollment period, you can buy a plan through the health insurance exchange in Delaware — with a premium subsidy if you’re eligible.
Premium subsidies make the monthly premiums much less costly than they would otherwise be. They’re provided based on your total household income (an ACA-specific calculation) for the year, and have to be reconciled on your tax return each year. Premium subsidies are larger and more widely available as a result of the American Rescue Plan, and those provisions have been extended through 2025 under the Inflation Reduction Act.
Marketplace plans are purchased on a month-to-month basis, so you can enroll even if you only need coverage for a few months before another policy takes effect — for example, if you’ll be enrolling in Medicare soon, or you’re newly employed and will have coverage under your employer’s plan after a waiting period is over.
Depending on your income, you might be eligible for Medicaid in Delaware.
When should I consider buying short-term health insurance in Delaware?
The Delaware Department of Insurance warns consumers to “beware of non-compliant alternative health plans,” including short-term health insurance.3
However, there are times when a short-term health insurance plan might be the only realistic option, such as:
- If you missed open enrollment for ACA-compliant individual market coverage (ie, Obamacare) or your employer’s healthcare plan, and do not have a qualifying event that would trigger a special enrollment period. Note that under Delaware rules, your short-term policy will only be able to provide coverage for three months.
- You’ll soon be enrolled in Medicare and don’t have access to another source of coverage in the meantime.
- You’re newly employed and your employer has a waiting period of up to three months before you can join the group health plan.
- You’ve enrolled in a plan through the marketplace in Delaware, but are waiting for it to take effect.
- If you’re not eligible for Medicaid or a premium subsidy in the exchange, the monthly premiums for an ACA-compliant plan might simply be too costly. This includes people who do not have lawfully present residency status in the U.S., since Medicaid and enrollment in the exchange (even at full price) are not available to people who aren’t lawfully present.
How has Delaware historically regulated short-term health insurance?
Until October 2, 2018, federal regulations limited short-term health insurance plans to no more than three months in duration, and prohibited renewals. The Trump administration began allowing for much longer short-term plans as of October 2018, unless a state imposed its own restrictions.
The Biden administration has approved much stricter regulations, which will limit short-term plans to total durations of no more than four months. But since Delaware has even stricter requirements — with total duration capped at no more than three months — the state’s rules will continue to apply.
New state regulations for short-term health insurance in Delaware were published in November 2018, and took effect on December 1, limiting short-term plans to three months in duration and prohibiting renewals. Delaware residents had a short window– from October 2 to November 30, 2018 – during which longer short-term plans were available for purchase. But those plans were no longer available after the end of November, and most of the insurers that previously provided short-term plans in the state had stopped doing so by December 2018.
Several of them had rejoined the state’s market by mid-2019, but market participation dwindled again by mid-late 2020 and has stayed quite low. As of 2024, however, at least one insurer offered short-term health plans in Delaware.
The new regulations were issued as emergency regulations, effective until March 31, 2019. That gave the state time to draft and implement permanent regulations for short-term health plans, which it did in January 2019. At that point, the permanent regulations took the place of the emergency order, although the provisions were identical.
Additional state regulations for short-term health insurance in Delaware go beyond simply restricting the duration of the plans. Under the terms of the new regulations:
- Short-term plans must have loss ratios of at least 60% (ie, total covered medical benefits divided by total premiums must be at least 0.6)
- If an applicant is replacing other health coverage with a short-term policy, the insurer or agent must provide them with an extensive notice about the limitations of short-term medical plans and the ins and outs of replacing other coverage with a short-term plan.
From 2018 through 2022, Highmark Blue Cross Blue Shield of Delaware was the only insurer that offered ACA-compliant individual market plans in Delaware’s health insurance exchange. Highmark’s initial rate filing for 2019 noted that the carrier had “included a 1% load for expected adverse selection due to the Short Term Limited Durational Insurance market expansion based on a recently proposed HHS rule modifying federal requirements.”
Since short-term healthcare plans only work for relatively healthy applicants (pre-existing conditions aren’t covered and can result in an application being rejected), the risk pool for ACA-compliant plans was expected to worsen somewhat in 2019 if the state had allowed short-term plans to become a long-term substitute for ACA-compliant coverage.
But a subsequent filing, submitted in July 2018, included a smaller overall rate increase, and the Delaware Insurance Department confirmed that the proposed premium increase due to the expansion of short-term plans was not included in the revised filing (and the Insurance Department ultimately approved an even smaller rate increase than Highmark had proposed in the revised filing). Ultimately, Delaware had sharply restricted short-term health plans by the time the 2019 plan year got underway.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org.
Footnotes
- ”ACA Open Enrollment: For Consumers Considering Short-Term Policies” KFF.org. Oct. 25, 2019 ⤶ ⤶
- ”Short-Term, Limited-Duration Insurance and Independent, Noncoordinated Excepted Benefits Coverage” U.S. Department of Health and Human Services. April 3, 2024 ⤶
- Limited Benefit Health Plan Information. Delaware Department of Insurance. Accessed January 2024. ⤶
