Availability of short-term health insurance in Arizona

Yes. As of 2024, there are at least five insurers offering short-term health insurance in Arizona.

Until the summer of 2019, short-term health insurance in Arizona was limited to a plan duration of no more than 185-day terms, and if renewal was available, the renewal term couldn’t be more than 180 days.

But Arizona enacted legislation (SB1109) in 2019 that aligned durational limits for short-term health insurance in Arizona with the Trump administration’s rules that took effect in 2018. Under that law, short-term plans in Arizona can have initial terms of up to 364 days, and can be renewable for a total duration of up to 36 months.

The Biden administration has finalized new 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. States can have more restrictive rules but not more lenient rules, so the new federal limits will apply in Arizona for plans issued starting in September 2024.

SB1109 did not include a specific effective date, and the consumer guide that the Arizona Department of Insurance published only noted that the new rules would take effect in “the summer of 2019.” But the Arizona Department of Insurance confirmed by email that the new rules would take effect August 27, 2019.

SB1109 clarified that the state would update Arizona Revised Statutes Title 20, Chapter 6, Article 4, with a new section, 20-1384, which was added in late August.

The insurers that sell short-term health coverage in Arizona can set their own term limits that are shorter than the allowable maximum, and can opt to make their plans non-renewable. So it’s important to understand the details of the specific plans you’re considering, as they vary from one insurer to another.

Short-term health insurance in Arizona can be purchased by residents who can meet the underwriting guidelines of insurers.

In general, people can qualify for short-term health plans if they’re under 65 years old (some insurers will only issue plans to people who are under 64 years of age) and do not have any of the short list of medical conditions that will result in a declined application.¹ But the specific underwriting rules vary from one insurance company to another.

Most short-term health insurance plans exclude coverage for any 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. Be sure to double-check all of the plan information before purchasing a short-term policy, to make sure that you understand its limitations.

If you need health insurance in Arizona, your first step should be to see whether you’re eligible to enroll in an ACA-compliant health plan (ie, an Obamacare plan), and whether you’ll qualify for premium subsidies (premium tax credits) to make that coverage more affordable.

Open enrollment for ACA-compliant individual/family (non-group) health plans runs from November 1 – January 15 in Arizona, and nearly anyone can enroll in coverage during that window.

Outside that window, a variety of qualifying life events will trigger a special enrollment period and allow you to enroll in an ACA-compliant major medical plan, either through the Arizona exchange/marketplace (HealthCare.gov) or directly through an insurance company (Obamacare rules apply both on-exchange and off-exchange, but subsidies are not available outside the exchange).

These ACA-compliant major medical policies are purchased on a month-to-month basis, so you can enroll in a plan 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 just need coverage until that other policy is active.

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 coverage and do not have a qualifying event that would trigger a special enrollment period. You may be able to use a short-term medical plan until the next open enrollment period (either for an individual/family plan or a plan offered by your employer), at which point you can switch to a more permanent coverage option.
• If you’re newly employed and the business has a waiting period of up to three months before you can enroll in the group’s healthcare plan. You can use a short-term plan during this period, and cancel it when the employer-sponsored coverage starts.
• If you’ll soon be enrolling in Medicare and aren’t eligible for any other coverage in the meantime. If you’re fairly healthy and don’t need coverage for pre-existing conditions, you may be able to use a short-term medical plan until your Medicare coverage takes effect (note that if you’re already receiving Social Security retirement benefits, you’ll automatically be enrolled in Medicare when you turn 65; your Medicare card will arrive about three months before you turn 65, but your Medicare coverage doesn’t actually take effect until the first of the month you turn 65, so you can’t use the card until that point).
• If you’ve signed up for an ACA-compliant individual/family plan (or an employer’s plan) but have to wait up to several weeks before the plan takes effect. Individual/family enrollments completed during the annual open enrollment period don’t take effect until January 1 or February 1, depending on when you enroll. And for enrollments completed during a special enrollment period, coverage in most cases won’t take effect until the first of the following month after the enrollment is completed. A short-term plan can provide temporary coverage (with an effective date as soon as the day after you apply) while you’re waiting for your new plan to take effect.
• If you’re not eligible for Medicaid or a premium subsidy in the exchange, the premium costs for ACA-compliant policies might be unaffordable.

People who are ineligible for premium subsidies include:

• Those whose incomes are too high for subsidies. There is normally a “subsidy cliff” at 400% of the poverty level, but that cap has been eliminated through 2025, under the American Rescue Plan and Inflation Reduction Act. Unless Congress reauthorizes those provisions, the “cliff” will return in 2026. (If your ACA-specific modified adjusted gross income is just a little above the subsidy-eligible threshold, there are steps you can take to reduce it).
• People who are unable to enroll in a plan through the exchange/marketplace due to their immigration status. A valid lawfully-present immigration status is necessary to enroll in a plan through the exchange, and subsidies are only available through the exchange.