The Administration issued final rules on short-term junk insurance plans, extending the maximum length of coverage from three to 12 months. The final rule also allows insurers to extend or renew coverage for up to 36 months (which was not included in the proposed rule). New plans could be available as soon as October 2018, but insurers expect a slow roll-out. These plans are expected to attract healthy enrollees from the Exchanges, increasing the cost of Exchange coverage. The final rule estimates that by 2028, enrollment in short-term coverage will increase by 1.4 million, while individual market enrollment will decrease by 1.3 million. Short-term plan premiums will be about half of the unsubsidized Exchange cost, but individual market premiums will increase about 5% by 2028.

Consumers will need to read the fine print closely—notice in 14-point font about the limitations of short-term coverage is required. But many Insurance Commissioners across the country remain concerned because they regularly hear from consumers about unexpected medical bills. Some states are initiating rule-making or considering legislation in response to the new short-term plan rules. Washington State’s Insurance Commissioner, Mike Kreidler, released a stakeholder draft of proposed rules on short-term plans, limiting short-term plans to three months, preventing renewal, and prohibiting the sale to people who already had three months of short-term coverage in the past 12 months. The proposal would also prevent short-term plans from being sold during open enrollment in competition with Exchange plans. NoHLA’s comments on the stakeholder draft point out that Washington consumers would benefit from stronger restrictions on the look-back period for pre-existing conditions and from provisions which ensure that the standard disclosure form be available in multiple languages. Proposed rules are expected from the Insurance Commissioner in the coming months.