In response to President Trump’s October 2017 Executive Order, the Departments of Health and Human Services, Labor, and the Treasury issued a proposed rule to amend the definition of short-term, limited duration insurance. The rule proposes to expand the availability of short-term, limited-duration health insurance by allowing consumers to buy plans providing coverage for any period of less than 12 months, rather than the current maximum period of less than three months.

Short-term, limited duration insurance is a type of health insurance coverage designed to fill temporary gaps in coverage that may occur when an individual transitions from one plan or coverage to another. According to the fact sheet presented by the Departments, individuals and families who would benefit from the new policy may include those: 

• who are between jobs or other sources of coverage
• who find ACA coverage too expensive or have seen their health insurance choices diminish; and
• whose doctors are not in network under ACA plans.

Longer limited-duration plans would also reduce the risk of a gap in coverage for people with short-term coverage who become seriously ill while covered. Under current rules, a person who becomes ill would likely not qualify for another plan less than three months in duration because of the illness and would then need to wait without coverage until the next year to gain coverage in the individual market. 

The proposed rule, if finalized, will provide additional options to those who cannot afford to pay the costs of soaring healthcare premiums or do not have access to healthcare choices that meet their needs under current law.