On February 20, 2018, the Departments of Health and Human Services (HHS), Labor and the Treasury released a proposed rule that would increase the length of coverage for short-term health insurance plans from three months to 364 days. They proposed this rule in response to an executive order President Trump issued in October 2017 telling these departments to propose regulations or guidance that would make this type of insurance more available in order to encourage consumer choice and provider competition in the health insurance market.

“For Americans who have been priced out of Obamacare plans, who can't find a plan that will cover their doctor, or who are looking for affordable coverage between jobs, these short-term plans could make a lot of sense,” wrote Alex Azar, U.S. Secretary of Health and Human Services, in a February 23 op-ed published by CNN.

In October 2016, the Obama administration capped the duration of these plans at three months because of concerns that the plans were allowing people to skirt the healthcare law and keeping healthier people off the exchanges created under the Affordable Care Act (ACA). The Trump administration wants to remove the three-month cap in order to expand insurance options for individuals who don’t have health insurance through an employer or through the exchanges. According to the Kaiser Family Foundation, insurers have already found a way around the three-month limit by offering four-packs of three-month plans that only require the applicant to qualify once.

The proposed rule is now in a comment period that ends April 23. During this period, anyone can express their opinions about the proposal. The government will then review the comments and decide whether to enact the rule into law as is or make changes. Unlike bills that must be passed by both the House and the Senate and then be approved by the president in order to become law, agency rules easily become law after the public comment period ends. Thus, we can expect some version of this rule to become law in the next few months.

Potential Benefits of Increasing Short-Term Coverage

By increasing the maximum length of a short-term policy from three months to 364 days, people who might otherwise be uninsured may be able to purchase short-term coverage instead. These people include:

● individuals who missed the Affordable Care Act’s open enrollment period and who don’t qualify for a special enrollment period

● indi