Health Insurance Options, For 2019, Are A Step Closer.

Sunset PracticeThe confirmation that I have been looking for all year broke last week. New Final Rules for Short Term Health insurance are imminent from HHS.

After the election, in 2016, but before he left office, Barack Obama changed the rules, as expressed by congress, for the use of Short Term Medical plans. In the Affordable Care Act congress authorized people to use them for period of 365 days. Mr. Obama changed the rules so that they were only available for 91 days at a time.

It has taken a couple of years, but the Department of Health and Human Services appears to be ready to reverse that change of rules back to what congress had authorized. The difference is that each state has the authority to decide what benefits will, and will not be offered within a state, how long they can be offered for or even if Short Term plans are allowed in a state.

Once that is done, it is still not guaranteed that a Short Term Medical plan will be available. It is anticipated that while many states will welcome the change in policy, some will not. Fortunately, here in Texas, that is not normally the case, but until the Final Rule is actually published by HHS and the Texas Department of Insurance approves the new plans, I cannot say, with any certainty what will be available.

Also, there is a chance, but not as much as with the Association Health Plans, that some Attorney General in a liberal state could find a crack in the rules that would allow things to be delayed in the court system. I do not anticipate that, but it could happen.

I am a tad excited right now. I will share with you what I anticipate. Just keep in mind that what I think, at this moment, may, or may not be what actually happens. Right now anything I say, or for that matter anyone says, is purely speculation.

  • Rumor has it that Americans can use this strategy for 3 years, with the same insurance company, but will have to re-enroll and pass medical underwriting every 12 months.
  • I expect that these new plans will be subject to minimal medical underwriting. What that means is that they will not be appropriate for anyone with a pre-existing condition. A pre-existing condition is defined as anything that has been treated, or a reasonably prudent person would have had treated, in the last 24 months. Minor “acute” medical conditions that have been treated successfully and health has been restored typically are not considered “pre-existing conditions” but “chronic” conditions, that require on-going treatment are.
  • I anticipate, but cannot be certain, that these type of plans will be PPO type of plans. Although, in my opinion, PPO plans are more generous than the HMO or EPO plans available through the Obamacare markets, an Obamacare plan will be the only option for individuals without group health insurance but with a pre-existing condition. (Once the courts have ruled on the Association Health Plans, there may be another option available for those who are self-employed but have pre-existing conditions.

I could be wrong, but this late in the year, I don’t anticipate enrollment to be available for Short Term Medical plans, for 2019, until the Annual Enrollment Period starts on November 1 for people not eligible for Medicare. The one thing that is certain is that, barring any liberal surprises, healthy Americans will have more options for 2019 than they had for 2018.

UPDATE: The above message was written for my agency newsletter in the middle of last week. Since it was written, there has been a significant development. HHS indeed published “Final Rules” that will make Short Term, Limited Duration Insurance policies available for 2019 as of October 1. That means that there is a good chance that they will be an option during this year’s Annual Enrollment Period.

But before you get too excited about the new rules, consider a couple of potential delays.

FIRST: Insurance companies will have to design plans that incorporate the new rules. The good news is that I am aware of 2 insurance companies who already offer these type of plans and know that they are anxious to be the first to market Short Term Limited Duration Insurance plans in Texas. However, it can take a few months for insurance companies, who do not already offer Short Term plans to make plans available in Texas. They not only have to build plans from scratch. They also have to get those plans approved by the Texas Department of Insurance before they can sell them to the public.

SECOND: Last month I got caught off guard by the stubbornness of Democratic politicians to oppose anything that comes out of the Trump White House. In June the Department of Labor changed rules to allow self-employed individuals, who are not eligible for “Obamacare” in the first place, to form Associations that will allow them to get true Group health insurance. That option was supposed to be available on September 1. In late July, the Attorneys General of 11 Democratic states, along with the Attorney General of the District of Columbia, filed a law suit against the Association Health Plan rules. Until the courts rule, it delays things and limits self-employed individuals to the plans that are available through the ACA or a Short Term Limited Duration Insurance plan, if they qualify.

Even though there is no problem from the Texas Attorney General, it is likely that this law suit will delay things for a few months, in Texas, until the courts work things out. I am not able to see why this action was taken, other than to make a political statement.

In the last few years I have become a political skeptic. I am not convinced that there are many politicians in DC who are concerned about the needs of the nation as much as their own political ambitions. The fact is that I have adopted a “Wait and See” attitude when it comes to health insurance. Although I am hopeful, I will not believe the plans will be available on October 1 until October 1. There are just too many, in the media and political offices, who are more concerned about seeing the failure of anything the Trump administration does than seeing Americans prosper.