Short Term Health Insurance In North Carolina

The state of North Carolina specifies in its insurance code that it abides by the federal definition of short term health insurance plans. The current federal rule is that the duration of these plans must be less than three months, a limit that was set by the Obama administration and took effect in early 2017.

The Trump administration wants to remove that limit and allow Americans to keep short term health plans for just under one year. Currently a proposed rule, this change would extend the term limit to 364 days. It stands to reason that North Carolina’s understanding of short term health insurance plans would shift accordingly.

Such a change could prompt North Carolina residents to select temporary health plans instead of insurance policies that comply with the standards of the Affordable Care Act. Approximately 496,000 state residents have non-group insurance that meets the ACA’s definition of minimum essential coverage. The Urban Institute’s Health Policy Center suggests that a federal regulation change could cause that number to drop by 77,000 people in 2019. That would be 15.6 percent of the state’s current Obamacare subscribers.

North Carolina is known for high premiums for ACA-compliant plans, and those premiums have risen sharply in the years since federal healthcare reform took effect. The lower premiums of short term health plans serve as a draw for North Carolina residents. To keep costs low, temporary insurers minimize their risk pool through medical underwriting. In order to get a policy, you must meet an insurer’s health criteria. Major problems in your health history can completely exclude you from coverage. Minor ones may not keep you from getting a policy, but they probably won’t be covered by your plan. Instead, the insurer will include a rider that specifies that the company has no responsibility for any claims related to your previous illness or injury.

Short term health insurance companies are also able to control their costs because, unlike ACA-compliant plans, they don’t have to provide minimum essential coverage. Instead, they can exclude many common conditions and treatments. In 2018, the Kaiser Family Foundation performed a survey of temporary health plans that were available in Charlotte, North Carolina. The group found 16 policies for consumers to pick from, and none of them offered maternity coverage. Just 38 percent provided some coverage for prescription drugs, 44 percent included substance abuse treatment and 44 percent made provision for mental health treatment.

The federal law on which the state relies for its definition of short term health insurance specifies that insurers and brokers must make it clear to customers that these policies do not qualify as minimum essential coverage. Although they can meet a need for many people during gaps between insurance policies, they are not the same as major medical plans. They don’t exempt you from having to pay the fine for not having health insurance either. Although this penalty will be zeroed out starting in 2019, it remains in effect until the end of 2018.

Carriers Offering Short Term Policies in North Carolina

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