Short Term Health Insurance In California

California is somewhat unique in that despite it being the state with the largest population within the United States, it has very limited options with respect to short term health insurance coverage and reputable alternatives to ACA / Obamacare plans. From our perspective, currently there is only one major option for short term health plans that we would consider for inclusion within ShortTermHealthInsurance.com. That company is listed below.

Critical Warning For Californian’s seeking alternatives to Obamacare / major medical plans: There are a number of plans being marketed as short-term health insurance that are not actually short term health insurance plans at all. Many of these plans are actually a product called Hospital Indemnity. These plans are in many ways very similar to accidental insurance benefits, or what many have become aware of thanks to companies like Aflac. Here you can find a link to an article that explains in detail what the difference is between Short Term Health Insurance and Hospital Indemnity Plans.

Insurance Carriers Offering Short-Term Policies in California

IHC Group (Independence Holding Company) – You can read our detailed review of IHC Group and their plans by going to the following link.

California’s insurance code specifies that short-term health insurance plans can have a duration of no more than 185 days. At the end of a policy term, you may be able to renew the plan one time. State law doesn’t limit how many short-term policies you can have, however, so even if you can only renew your current plan once, you may be able to enroll in a different temporary plan after that.

Despite the law on the books in California, you don’t currently have the option to enroll in a short-term health plan that lasts for six months. Federal limits have restricted Californians’ enrollment options. Throughout the country, the maximum duration of a temporary health insurance plan is 90 days. This three-month limit went into effect in 2017 after a ruling issued by the Obama administration.

The Trump administration wants to reverse that ruling, and expressed it’s intent to do so within 2018. The current administration has issued a proposed rule that would extend the maximum duration of a short term health plan to 364 days.

The Urban Institute’s Health Policy Center has estimated that if that proposal becomes a final rule, approximately 387,000 Californians who are currently enrolled in standard health insurance would stop carrying such policies. This represents about 21 percent of current enrollees. Instead, these people might opt to sign up for short-term plans.

To prevent such an exodus from plans that are compliant with the standards of the Affordable Care Act, some California legislators have proposed imposing stricter state regulations on short-term health plans. In fact, legislation that was introduced in 2018 would eliminate the sale of temporary health plans for Californians. This bill, SB910, is still being considered by the state legislature.

In the meantime, the California Department of Insurance cautions consumers that temporary health plans don’t meet the qualifications for health insurance under the ACA. They don’t count as minimum essential coverage, and during 2018, you may be subject to a fine for subscribing to one of these plans instead of a standard policy.

Temporary health plans don’t offer the comprehensive coverage that ACA-compliant plans do. For example, California insurance code specifically mentions that these policies don’t have to provide coverage for maternity care, prosthetic devices or mammograms.

The Kaiser Family Foundation conducted a survey of short-term health plans in 2018. At the time of the study, there were two limited-duration health plans available in Los Angeles. Neither of these plans provided any provisions for prescription drugs, maternity care, mental health services or substance abuse treatment.

ACA-compliant plans must cover pre-existing conditions, but temporary health insurance plans don’t. Short term insurers have the right to turn you down for coverage because of your health history or deny any claims related to a condition that began before your coverage period.

Short-term insurers also have the right to impose an annual or lifetime cap on benefits. In the Kaiser study, the Los Angeles plans that the researchers looked at had coverage caps that ranged from $750,000 to $2 million.

Only licensed companies are allowed to sell short term health plans in California. They are not allowed to market these plans as ACA-compliant health insurance and must be clear about the policies’ limitations. Consumers who have questions about this type of plan are encouraged to contact the Department of Insurance.  

Sources:

https://www.chcf.org/wp-content/uploads/2018/04/ShortTermInsuranceRiskCA.pdf
https://www.billtrack50.com/BillDetail/929344/2838
https://www.urban.org/sites/default/files/publication/96781/2001727_0.pdf
https://www.kff.org/health-reform/issue-brief/understanding-short-term-limited-duration-health-insurance/
http://www.insurance.ca.gov/01-consumers/105-type/95-guides/05-health/health-ins-guide.cfm
http://www.insurance.ca.gov/0400-news/0100-press-releases/2018/release036-18.cfm