Availability of short-term health insurance in Maryland

Yes. As of 2024, at least two insurers are authorized to sell short-term health insurance in Maryland.²

Until October 2, 2018, federal regulations limited short-term plan duration to no more than three months, and renewals were prohibited. Much longer short-term plans are allowed from that point until August 2024, under federal regulations that took effect in 2018, unless a state imposed its own restrictions.

Maryland enacted HB1782 in 2018, which limits short-term plans to three months and prohibits renewal. The Trump administration’s 2018 rules for short-term plans were clear in noting that states could continue to impose tighter regulations than the new federal rules. So, short-term health insurance in Maryland has continued to be nonrenewable and have maximum terms of three months.

For short-term plans issued starting in September 2024, new federal rules limit initial terms to no more than three months, and total duration — including renewals — to no more than four months. But Maryland’s stricter rules, limiting total duration to no more than three months, will continue to be applicable.

The Maryland Insurance Administration conducted a study of short-term health insurance plans in 2017, resulting in a detailed report about the state’s short-term market and associated state regulations.

The study was to determine whether Maryland had a need for short-term plans sold by non-admitted insurers, in addition to the already-available short-term plans sold by admitted insurers. (Here’s a summary of what admitted and non-admitted mean.) Ultimately, the Maryland Insurance Administration recommended that the legislature continue to allow only admitted insurers to offer short-term health insurance in Maryland.

Non-admitted insurers can essentially only sell coverage in Maryland that serves as travel insurance (for a Maryland resident who will be traveling outside the country, or for a resident of another country who will be traveling to Maryland).

Short-term health insurance in Maryland can be purchased by residents who meet the underwriting guidelines of insurers. In most cases, this means being under 65 years old and not having a medical condition that will result in a declined application.³ But the specific underwriting rules are set by the insurance company that offers the coverage.

Short-term health insurance plans usually have blanket exclusions for pre-existing conditions, and they often use post-claims underwriting. This means that if a claim is filed, the insurer can go through the person’s medical records to make sure the claim isn’t related to a pre-existing medical condition.⁴

Short-term health plans often exclude coverage for some of the ACA’s essential health benefits (most commonly, maternity care, prescription drugs, and mental health care),³ and impose dollar limits on the coverage they do provide.

This makes it especially important to carefully read 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 Maryland, check first to see if you can enroll in an ACA-compliant major medical plan through Maryland Health Connection (the state-run health insurance exchange). 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 enroll outside of that window if you qualify for a special enrollment period, most of which are triggered by a qualifying life event.

ACA-compliant 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 soon be enrolled in Medicare or a new employer’s plan. And depending on your total annual household income, you may qualify for a premium subsidy for the months you have coverage purchased through the marketplace. These subsidies can be substantial, and might make your monthly premiums much less costly than you thought they’d be.

Whether you’re in Hagerstown or Baltimore, there may be scenarios when a short-term health insurance plan might be the only realistic option, such as:

• If you missed open enrollment for ACA-compliant coverage and lack a qualifying event to trigger a special enrollment period. Under Maryland rules, however, the short-term policy will only be able to cover you for a maximum of three months.
• You’ll soon be eligible for Medicare and don’t have any other coverage options for the time while you’re waiting for Medicare to start (note that a short-term plan is not likely to be considered creditable coverage by a Medigap insurer, so you could end up with a waiting period for pre-existing conditions on a Medigap plan once you enroll in Medicare).
• You’re newly employed and the business has a waiting period of up to three months before your coverage under their group health plan can start (this is assuming you don’t have a qualifying event, such as loss of other coverage, that would allow you to sign up for an ACA-compliant plan to cover that waiting period).
• You’ve enrolled in an ACA-compliant plan but are waiting for the coverage to take effect. If you enroll during open enrollment, you could have a wait of up to two months before the plan takes effect (ie, if you enroll on November 1, the plan takes effect two months later, on January 1). And for most special enrollment periods, coverage can’t take effect before the first of the following month. A short-term plan can be used to bridge this gap.
• If you’re not eligible for Medicaid or a premium subsidy for ACA-compliant coverage, and the full-price premiums don’t fit in your budget.

Even with the American Rescue Plan’s expanded subsidies through the end of 2025 and the family glitch fixed, subsidies are still unavailable to people whose immigration status makes them ineligible to enroll in a plan through the exchange (you must be lawfully present in the US to enroll in a plan through the exchange, and subsidies are only available for plans purchased in the exchange).

The Maryland Insurance Administration’s (MIA) report notes that short-term plans must be filed with the MIA, reviewed, and approved before they can be sold.

State-mandated benefits must be covered, including “some level of coverage for medically necessary expenses incurred as a result of inpatient room and board, hospital care, intensive care, emergency room care, surgical care, diagnostic services, outpatient treatments, and doctor visits. Mandated benefits in Maryland include coverage for preventive care screenings, habilitative services, mental health and substance misuse, and other services that the legislature has determined should be provided to Maryland residents.”

Admitted insurers selling short-term plans in Maryland are also required to have processes in place to handle preauthorizations, appeals, and grievances.

The Maryland Insurance Administration maintains a page called “Is a short-term medical plan for you?” with details that help consumers understand how the plans work, and the coverage limitations that they impose.

In April 2018, Maryland enacted SB28, which had passed unanimously in both chambers of the state legislature. The legislation took effect October 1, 2019, and requires short-term healthcare plans issued on or after that date to provide coverage for treatment related to “mental illness, emotional disorders, drug misuse, or alcohol misuse.”

The scope of the coverage is left up to the insurers to some degree, but there were some basic requirements incorporated in the legislation to ensure that Maryland’s existing mental health parity law would apply to short-term health plans:

• The plans must include coverage for medically necessary mental health and substance abuse treatment, including both inpatient and outpatient care.
• The partial hospitalization benefit cannot be limited to fewer than 60 days.
• Managed care can be used to deliver the mental health/substance abuse coverage, but only insofar as the plan uses managed care to deliver benefits for physical illnesses/injuries. And factors used to manage the benefits cannot be any more stringent for mental health/substance abuse coverage.
• If insurers charge a copay for methadone maintenance treatment, it cannot be more than 50% of the costs of the treatment.

As of August 2019, most of the short-term coverage for sale in Maryland included exclusions for mental health and/or substance abuse care. But that had to change as of October 2019, when the new requirements took effect.

It’s important to understand, however, that short-term health plans are still medically underwritten: Pre-existing conditions are generally not covered at all, and an insurer can reject an applicant altogether if they have medical conditions that aren’t compatible with the insurer’s underwriting requirements. For some of Maryland’s most popular short-term health insurers, this has long included a history of mental illness or substance abuse.

So while short-term healthcare plans in Maryland now have to cover mental health and substance abuse treatment just as they would any other medical condition, people who have existing mental health or substance abuse issues will generally not be able to receive treatment for these conditions under a short-term plan. Instead, it would have to be a new condition that arises during the time the person has a short-term plan, and is in no way linked to anything pre-existing (note that short-term health insurers tend to use post-claims underwriting, which means that they review medical records after a person has a claim, to make sure it’s not related to a pre-existing condition).