Short Term Health Insurance In Delaware

Delaware residents can find short term health insurance coverage that lasts for up to three months at a time. That’s not a state rule; it’s a federal one. Delaware insurance code doesn’t dictate a specific length for temporary health plans, so the state relies on federal standards. Since 2017, guided by a rule issued by the Obama administration, the federal government has imposed a 90-day limit on short term health plans.

If the Trump administration is able to follow through with its recent proposal, however, this limit may soon be lifted. The current administration wants to expand the length of short term plans so that people can receive coverage from a single plan for up to 364 days at a time.

With access to year-long short term health insurance plans, many Delaware residents might opt for this type of coverage over standard health insurance plans purchased independently or through the healthcare marketplace. The Health Policy Center of the Urban Institute suggests that approximately 6,000 people in the state might choose not to renew their current insurance plans. This would be an exodus from major medical plans of about 20.7 percent of the state’s current individual insurance market.

State insurance officials require insurers that offer short term health plans to clearly disclose that this type of plan doesn’t meet the standards set by the Affordable Care Act. In the past, the state has imposed a substantial fine on companies that have tried to pass off their short term insurance products as ACA-compliant plans. Consumers who held one of these deceptive plans were given the opportunity to cancel their policies and receive a refund, but they could also choose to keep their short term plans if desired.

Keep in mind that if you subscribe to a short term health plan and choose to cancel it in favor of traditional coverage, you must wait for an open enrollment period in order to do so. Losing your short term coverage does not qualify you for a special enrollment period outside of open enrollment.

Because temporary insurance does not count as health insurance that meets ACA standards, you may have to pay the individual mandate penalty if you opt for this type of plan instead of a major medical, ACA-compliant insurance policy. This penalty is in effect until the end of 2018. The tax bill signed into law in 2017 zeroed out the penalty starting in 2019.

One reason that temporary health insurance doesn’t qualify as full health insurance is that these plans aren’t obligated to cover all of the essential benefits that are required of ACA-compliant plans. By not providing comprehensive benefits, insurers are often able to attach lower price tags to these limited-duration policies.

Covered benefits vary widely among temporary health insurance plans. In a 2018 survey of short term plans available in Wilmington, Delaware, the Kaiser Family Foundation evaluated 21 plans. None provided any benefits for maternity care, and only a third of them had any prescription drug benefits. Over half (57 percent) offered some coverage for substance abuse treatment while 81 percent of the Wilmington plans included mental health benefits. That’s significantly higher than the national average. Across the country, only 57 percent of short term health insurance plans offer any coverage for mental health services.

Carriers Offering Short Term Policies in Delaware

LifeShield National Insurance Company
The IHC Group (Independence Holding Company)
Companion Life Insurance Company (Pivot Health)
UnitedHealthcare (Golden Rule Insurance Company)
Everest Prime

Sources:
Marketplaces located at UHOne.com (UHC)

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/

https://insurance.delaware.gov/wp-content/uploads/sites/15/2016/12/HealthGuide.pdf

https://www.delawareonline.com/story/news/health/2017/10/12/trump-order-could-limit-health-coverage-delaware-officials-say/758611001/