New Executive Order Expected To End Obama Regulation Limiting Short-Term Health Insurance Coverage to 3 Months

Thursday, October 12, 2017 General News
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Regulatory change to benefit large number of Americans needing gap coverage, says HealthPocket

MOUNTAIN VIEW, Calif., Oct. 12, 2017 /PRNewswire-USNewswire/ -- The Trump administration issued a new executive order

today that laid the foundation to reverse the Obama administration's late 2016 rule restricting short-term health coverage to less than three months. The short-term rule was issued on October 31, 2016 and did not go into effect until April of this year, after the Obama administration left office. In the several decades prior to this new regulation, consumers had the option to enroll in a short-term health plan for up to 12 months depending on their state law. The removal of the three-month limitation comes after months of policymaker outreach and education by HealthPocket and others to illuminate the consumer harm associated with the regulation.

The Trump administration's executive order is expected to restore each state's prior length-of-coverage rules. For more than three decades, state-specific regulation had been the norm in the short-term health insurance market. A maximum coverage period of 364 days was allowed in most states and this maximum returns with the implementation of the executive order along with the state's ability to limit short-term plans to a briefer duration. Importantly, the one-year maximum duration is the same length that a person can be locked out of the Affordable Care Act market if that person misses the annual enrollment period for exchange health plans.

The reversal of the three-month limitation, which likely will be implemented in January after a CMS comment process, will be welcomed not only by short-term policyholders but also by a diverse range of policymakers and industry leaders. 14 U.S. senators led by Sen. Ron Johnson asked for the short-term regulation to be rescinded earlier this year. Organizations objecting to the three-month rule include the National Association of Insurance Commissioners (NAIC), the National Association of Health Underwriters (NAHU), and the state departments of insurance in Georgia, Illinois, Kansas, Louisiana, Nebraska, Oklahoma, and Wisconsin. Consumer sentiment was strongly against the three-month limit as reflected in the overwhelming negative comments submitted by private citizens on HealthPocket submitted a white paper and supporting research to the Centers for Medicare and Medicaid Services ("CMS") documenting the consumer harm caused by the 3-month rule.

"Since the three-month restriction was first proposed last year, HealthPocket has been at the forefront of illuminating the unintended consumer harm that would result from this regulation. Numerous populations were hurt ranging from consumers who missed Obamacare's open enrollment, to consumers who have limited or no ACA exchange plan options, to consumers in the "Medicaid gap", to people without legal residency in the U.S.," observed Bruce Telkamp, Co-Founder and CEO of HealthPocket, Inc. "In contrast, the executive order issued today will provide relief to a large and growing number of U.S. consumers who need to access to a strong marketplace of gap health insurance plans. We applaud today's decision by the Trump administration to make more health insurance choices available to consumers, as well as the complimentary efforts by Sen. Ron Johnson, the NAIC, and other key stakeholders."

For more than 30 years, short-term health insurance has served as a bridge for individuals and families going through transitions. It is a form of major medical insurance that provides coverage in case of illness or an accident for a temporary period of time. Applications are underwritten by the insurance company so coverage is not guaranteed, though the vast majority of applicants are accepted. To avoid adverse selection scenarios where consumers get coverage just for a major healthcare service and then drop the coverage, short-term health plans do not cover pre-existing conditions. is a free website that compares and ranks all health insurance plans, helping individuals, families, and small businesses to make their best health plan decisions. HealthPocket publishes health insurance market analyses and other consumer advocacy research. HealthPocket's research is nonpartisan and uses only objective data from government, non-profit, and private sources that carry no conditions that might restrict the site from serving as an unbiased resource. HealthPocket, Inc. is independently managed and based in Mountain View, California. Learn more at


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