Q. There are no short-term health plans for sale in my state and I don’t qualify for a special enrollment period for ACA-compliant coverage. Is my only option to go without coverage until next year?
A. Although the Trump administration relaxed the rules for short-term plans in 2018, states can continue to impose their own rules for short-term plans, and the majority of the states have done so. The Biden administration has proposed new rules for short-term plans that would sharply limit their durations, but states would continue to be able to have even more restrictive or prohibit the sale of short-term plans altogether.
As of 2023, there are no short-term plans available for purchase in California, Colorado, Connecticut, DC, Hawaii, Maine, Massachusetts, New Jersey, New Mexico, New York, Rhode Island, Vermont, and Washington. In each case, it’s because state laws either prohibit this type of coverage altogether, or because the state’s laws are strict enough that short-term insurers have chosen not to offer coverage.
No short-term plans for sale?
So what are your options if you don’t have a qualifying life event that would allow you to enroll in an ACA-compliant plan, and short-term plans are not for sale in your area? This is a tough situation. In terms of getting real major medical health insurance, you’ll generally have to wait until open enrollment to sign up, with coverage effective next January. In most states, open enrollment for ACA-compliant plans runs from November 1 to January 15 (enrollment generally needs to be completed by December 15 in order to have coverage effective on January 1).
(Note that there are some exceptions: If you’re part of the American Indian and Alaska Native population, you can enroll at any time. And if you’re eligible for premium tax credits in the marketplace but your household income doesn’t exceed 150% of the poverty level, you can enroll in a marketplace plan anytime through at least the end of 2025).
Of course, if you or your spouse become newly eligible for an employer-sponsored plan between now and then, you could enroll in that plan as soon as you become eligible. If you become eligible for Medicaid or CHIP, you can enroll anytime, and if you become eligible for Medicare, you’ll have a seven-month window during which you can enroll.
Otherwise, your options are very limited but not necessarily nonexistent. Depending on where you live, how healthy you are, and various other factors, you may be able to enroll in some type of limited coverage. It won’t be real health insurance and generally won’t cover pre-existing chronic medical conditions. But it might end up being better than nothing.
Healthcare sharing ministry plans
If your lifestyle is compatible with the requirements for healthcare sharing ministries, this might be an option that will provide at least some level of coverage until you can enroll in a health insurance policy.
However, it’s important to understand that healthcare sharing ministries are not health insurance. The “coverage” they provide isn’t backed by any sort of guarantee, and consumers have fairly limited recourse if they run into problems with the sharing ministry plan.
Although no sharing ministry plan is actually providing real insurance coverage, some sharing ministry plans are less reputable than others and it’s important to do your homework if you’re considering a sharing ministry plan as a last recourse.
Fixed-indemnity plans
Fixed-indemnity plans are exempt from ACA regulations, and they’re often conflated with short-term health plans. But they are a very different type of coverage.
Short-term plans tend to be somewhat similar to the sort of coverage that was available in the individual major medical market prior to 2014 (before the ACA reformed that market and added numerous consumer protections). Fixed-indemnity plans, however, tend to provide much less coverage.
Instead of a deductible, coinsurance, and capped out-of-pocket costs, a fixed-indemnity plan operates from the perspective of limiting how much the insurance company has to pay, rather than limiting how much you have to pay. (To be clear, short-term health plans don’t entirely limit how much you have to pay either, since they have annual and lifetime benefit limits.)
So fixed indemnity plans will have a schedule of benefits that the policy will pay for certain services. For example, they might pay $1,000 for each night you spend in the hospital, $1,500 for a surgery, and $50 for an office visit. The amounts vary from one plan to another, but the point is that the benefit amounts are laid out in the policy itself, regardless of how much the services actually cost. (Note that the Biden administration has proposed rule changes that would prohibit fixed indemnity plans from paying benefits on a per-service basis and would require them to only pay on a per-period basis.)
So if your fixed indemnity plan will pay $1,500 for a night in the hospital and you end up getting a bill for $15,000 after spending one night in the hospital, you’re going to be on the hook for the other $13,500. Depending on the plan, you may receive fixed reimbursement amounts for other services performed while you were in the hospital, but this type of per-service reimbursement would no longer be allowed if the Biden administration’s proposed rule changes are finalized.
A fixed-indemnity plan should not be considered a substitute for health insurance and it’s absolutely not something that you should rely on long-term. But if you find yourself in a position where there is literally nothing else you can buy, it could end up saving you some money if you need medical care, so it’s arguably better than nothing. And there are fixed-indemnity plans for sale in many of the states where there are no short-term plans available.
Direct primary care
Depending on where you live, you may be able to find a primary care doctor who offers services through a direct primary care plan. These plans will help to keep your costs for primary care steady and predictable, but they won’t cover you if you need medical treatment beyond what can be provided in a primary care setting.
So while they are not a substitute for health insurance, you might gain some peace of mind by enrolling in a direct primary care plan while you wait to enroll in a real health insurance policy.
Community health centers
If you have no realistic option for health insurance coverage, you may still be able to access health care, for free or on a sliding scale basis, at a community health center or charitable clinic. Health centers provide primary care, but clinics in some locations can also provide additional services, including dental care, prescription drugs, and mental health care.
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.
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