Short Term Health Insurance In South Dakota

According to South Dakota law, short-term health insurance plans must have a duration of 12 months or less. However, the state law also specifies that health insurance policies that last longer than six months must include guaranteed renewability. Short term health plans are by nature nonrenewable. Therefore, all short-term health plans in South Dakota must not have a duration of more than six months.

Federal law supersedes state rules, however, and you can’t get a temporary plan that lasts longer than three months because a federal regulation caps the duration of these plans at 90 days. That restriction may soon be lifted by the Trump administration. It would be replaced with a 364-day limit. Under such a broad federal law, South Dakota residents would still have to abide by the state’s six-month restriction.

Doubling the current allowable length of temporary health insurance plans might draw some people away from their current health insurance. At present, about 42,000 people in the state have non-group health plans that qualify as essential minimum coverage under the Affordable Care Act. According to research conducted by the Urban Institute’s Health Policy Center, it’s possible that around 23 percent of those people (around 10,000) might quit carrying major medical insurance in 2019 if the Trump administration is successful in expanding limited-duration insurance. Some might pick up temporary health plans instead.

Because short term health insurance plans are nonrenewable, you can’t elect to simply extend your coverage at the end of the policy, nor can the insurance company add to its duration. The only way to continue coverage is to take out an entirely new policy. This requires reapplying and going through the underwriting process again. South Dakota does not place stipulations on how often you can do this.

The state does recommend that consumers limit their use of these policies to short periods of time. That’s because these plans are inherently designed to fill coverage gaps rather than to meet long-term needs. They don’t qualify as essential minimum coverage under the ACA, and you may be charged a fine if you carry one of these policies in lieu of major medical coverage during 2018.

Because these plans are outside the scope of ACA rules, insurers can choose which benefits to cover. In 2018, the Kaiser Family Foundation researched short term health insurance plans in Sioux Falls, South Dakota. The group found that none of the eight available plans provided maternity care or prescription drug benefits. Half of the policies offered some coverage for mental health services, and half of them covered treatment for substance abuse.

In addition to providing limited coverage, temporary health insurance companies can deny applicants based on pre-existing conditions or charge them more because of their health history. Not all pre-existing illnesses or injuries are enough to get you turned down for a policy, but short-term plans often exclude coverage for treatments related to past medical problems.

Carriers Offering Short-Term Policies in South Dakota

LifeShield National Insurance Company
Everest/Everest Prime
National General
The IHC Group (Independence Holding Company)

Sources:

http://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=StatuteChapter&Statute=58-17
http://dlr.sd.gov/insurance/health_insurance.aspx#short_term
http://sdlegislature.gov/rules/DisplayRule.aspx?Rule=20:06:40:02