Thanks to a recent change in federal regulations for short-term health insurance policies, Mississippians could have a chance to purchase cheaper policies.
In August, the U.S. Department of Health and Human Services issued a rule that extended the duration of short-term plans from three months to 12, with renewals that could stretch them out for up to three years. The policy went into effect in October.
According to HHS data, the monthly premium for a short-term policy in the fourth quarter of 2016 was $124, compared with $393 for an unsubsidized individual market plan.
Mississippi Insurance Commissioner Mike Chaney said these policies fill what he called a “doughnut hole” in the market place, where they are between jobs and do not have the ability to pay the high cost of temporary health insurance, known as COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985).
He said a few thousand Mississippians at the most would be buying these policies, but having their availability means they have a chance to buy affordable health insurance that was previously unavailable. He also said several insurance companies are already offering the policies in the Magnolia State.
“It fills a very needy void in the market,” Chaney said. “It gives the consumer another choice. You need to be certain your doctor will accept the policies and they need to be certain to what will and won’t be paid. We’ve not had any complaints on them.”
These policies also could be utilized by seniors not eligible for Medicare and young adults who have aged out from their parents’ plans.
According to a report by the Foundation for Government Accountability, yearly premiums for health insurance have skyrocketed from an average of $2,800 in 2013 to $6,000 in 2017 and more than 30 million remain uninsured. The report also says that 56 percent of counties in the U.S. had only one insurer to choose from in the individual market.
The rule change will help 2.5 million gain health insurance, according to the FGA.
Mississippi is one of 17 states with no restrictions in state law that would limit the plans.
These short-term plans are much cheaper for consumers, but lack some of the mandated coverages that are part of the policies sold under the exchanges set up by the Affordable Care Act, also known as Obamacare. This means these plans can be better tailor-fit to a consumer’s need than the several sizes fit-all types offered by the exchanges.