Health Issues

In the United States, nearly half of the people under the age of 65 get their health insurance from an employer. ^{But the downside of having health insurance linked to employment is that losing your job will also mean losing your health insurance, adding stress to an already stressful situation. Fortunately, when it comes to obtaining health insurance for the self employed, consumers have several coverage options to consider.}

Let’s take a look at the options:

1. ACA Marketplace individual and family health insurance

2. COBRA continuation of group coverage

3. Medicaid

4. Insurance through a spouse’s health plan

Frequently asked questions

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org.

In this article

In early 2023, states began the process of redetermining eligibility for the approximately 94 million people who were enrolled in Medicaid/CHIP at that point. Roughly a year into the process, disenrollments appear to be on track to be higher than projected.

Here’s a look at what’s been happening with disenrollments – and also a look at the beneficiaries who have had their Medicaid coverage renewed during the process.

Under the “unwinding” of the pandemic-era continuous coverage rule, states could begin to disenroll people from Medicaid as early as April 1, 2023, although most states waited until May, June, or July.

Given that there were already more than 20 million disenrollments as of April 2024 – with a reporting lag in some states and several months to go in the unwinding process in many states – it certainly looks like the total number of disenrollments will ultimately be higher than the projections once the unwinding is complete.

But net Medicaid/CHIP enrollment will likely remain higher than it was pre-pandemic. Some people disenrolled from Medicaid during the unwinding process have since re-enrolled, as shown in Idaho. And several states have expanded Medicaid in the last few years, resulting in more people becoming eligible for coverage:

• Utah and Idaho expanded Medicaid in January 2020, just as the pandemic was beginning.
• Oklahoma expanded Medicaid in July 2021
• Missouri expanded Medicaid in October 2021
• South Dakota expanded Medicaid in July 2023
• North Carolina expanded Medicaid in December 2023

Medicaid enrollment is open year-round, so even in states where the eligibility guidelines have not changed, there have been new enrollments alongside the disenrollments. The influx of new enrollees over the last year – including some who were disenrolled and then re-enrolled or had their coverage reinstated – is why net enrollment is only down about 11.8 million people, even though 20.1 million people have been disenrolled.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org.

A finalized federal rule announced by the Departments of Treasury, Health and Human Services, and Labor on March 28, will impose new nationwide duration limits on short-term limited duration insurance (STLDI) plans.

The rule – which applies to plans sold or issued on or after September 1, 2024 – will limit STLDI plans to three-month terms, and to total duration including renewals of no more than four months.

A “renewal” will include a new policy issued by the same insurer (or another insurer in the same controlled group, meaning they’re treated as a single employer)) within 12 months of the effective date of the first policy. So a person will not be able to purchase multiple consecutive policies – a practice known as “stacking” – from the same insurer or an affiliated insurer. The part of the rule helps to avoid scenarios in which consumers enroll in multiple STLDI policies without realizing that it isn’t comprehensive coverage.

Why did the federal government implement this rule?

As the author has previously noted, the changes are designed to ensure that short-term coverage is used to fill a temporary gap between two comprehensive policies, rather than serving as a long-term coverage solution. Since STLDI is “excluded from the definition of individual health insurance” and is thus not regulated by federal rules such as the Affordable Care Act, the No Surprises Act, the Mental Health Parity and Addiction Equity Act, etc., the federal-level consumer protections for STLDI enrollees are limited.

The rule is also intended to make it easier for consumers to distinguish between ACA-compliant individual/family health insurance and STDLI and thus reduce the number of people who inadvertently purchase short-term coverage when trying to buy comprehensive coverage.

STLDI plans sold on or after Sept. 1, 2024 will need to include an updated and comprehensive disclosure notice that highlights the major differences between STLDI and ACA-compliant individual/family health insurance sold through the Marketplace.

The disclosure, which is illustrated on page 102 of the final rule, must be displayed on the first page of the policy/contract and any associated marketing or enrollment materials.

How does the rule affect STLDI plans currently in effect?

Under the new rules, there is no change to STLDI policies that are already in effect, or policies that are sold and issued before Sept. 1, 2024. The current rules continue to apply to those policies.

This means policy durations of plans that are sold and issued prior to Sept. 1, 2024 are up to the states and the insurers as long as the policies don’t have initial terms of more than 364 days or total duration of more than 36 months.

How will state regulations be affected by the rule?

As has been the case with previous federal rules for STLDI, states can impose stricter rules but not more lenient rules regarding STLDI duration.

So for example, a state will be able to limit STLDI to a duration of under four months (or ban them altogether, as some states have already done) or prohibit the sale of a second STLDI policy within 12 months – even if it’s issued by a different insurer.[footnote “States Step Up to Protect Insurance Markets and Consumers from Short-Term Health Plans” Commonwealth Fund. May 2, 2019]

• In most of the country, current STLDI duration limits vary from six months up to the maximum 36 months allowed under current federal rules. STLDI plans sold in those states will have to come into compliance with the new federal rules starting with plans issued on or after Sept. 1, 2024.
• Short-term health plans are currently unavailable in 14 states and DC..
• In another three states — Delaware, Maryland, and Oregon — short-term health insurance is available but already limited to three months in duration, so the new rules won’t change anything about STLDI durations in those states. (Virginia also limits initial terms to three months but allows the total duration to extend to six months. ^{So plans in Virginia will be further limited by the new federal rules.)}

How many people have short-term health insurance?

It’s difficult to pin down the exact number of enrollees, as data reporting of STLDI coverage is not consistent across states. The final rule cites a 2023 report from the National Association of Insurance Commissioners, which indicated that 235,775 people were covered by short-term health plans at the end of 2022.

But, as noted in the final rule, that doesn’t include people who had STLDI for only part of the year, nor does it include people with association-based STDLI coverage, which is a significant portion of the market.

The final rule (see page 163) also notes that the Congressional Budget Office and the Joint Committee on Taxation had previously estimated that as many as 1.5 million people might be enrolled in STLDI. But the rule also clarified that was before the ACA’s premium subsidies were enhanced by the American Rescue Plan and Inflation Reduction Act – legislation that made Marketplace coverage more affordable and perhaps reduced the number of people who opted for STDLI.

Will people with STLDI have a special enrollment period to switch to individual/family coverage?

No. The final rule (page 68) notes that while there is already a special enrollment period (SEP) for group health insurance when an STLDI policy terminates, there is no similar SEP for individual/family health coverage. That will continue to be the case under the new rule.

States that operate their own health insurance Marketplaces are allowed to establish SEPs that differ from those available through the federally run Marketplace, HealthCare.gov. But HealthCare.gov, the Marketplace platform in 32 states, will continue its current protocol of not allowing a SEP due to the termination of a short-term health insurance policy.

However, as we’ll discuss below, the timing of the new rule is designed to ensure that people can purchase a STLDI plan that can continue through the end of 2024 (assuming they’re healthy enough to enroll in STLDI and assuming that insurers in their state offer STLDI with the maximum allowable four-month duration). By then utilizing the open enrollment period for ACA-compliant coverage, the consumer would be able to transition without interruption in coverage to an individual-market policy that starts on January 1, 2025, if they choose to do so.

What can people do when their short-term policy terminates?

The current maximum duration limit for policies sold or issued before September 1, 2024 varies by state, and it’s also important to understand that insurers can further limit their short-term policies beyond what state or federal rules allow. (An insurer can, for instance, cap total policy durations at six months, even if state and federal rules allow for 36 months.)

If a person enrolls in a new STLDI plan on or after September 1, the plan will be allowed to cover them through the end of 2024, as that will be no more than four months away. But again, four months will be the maximum allowable duration, not the required duration. Insurers will be able to offer, for example, a three-month policy that isn’t renewable. For this reason, consumers need to be well-informed about their policy details.

Assuming a person purchases a policy with a four-month duration that starts on September 1, they will be able to select a non-temporary major medical plan for calendar year 2025 during open enrollment for individual/family coverage which will be effective as early as January 1, 2025. Open enrollment begins on November 1, 2024. This will allow them to avoid having a coverage gap.

If a person chooses to purchase or renew an existing longer-term STLDI policy before the end of August 2024, their plan termination dates will vary depending on the plan they choose. For example, a policy purchased while the current rules are still in effect might last for six months (i.e., into early 2025) or it might last for 36 months. This is where consumers will need to be vigilant in understanding the implications of what they’re purchasing.

If they buy a six-month, non-renewable short-term policy that takes effect August 15, 2024, it will terminate in mid-February 2025. At that point, open enrollment for ACA-compliant 2025 individual/family coverage will be over.

The person will not be able to switch to an ACA-compliant plan unless they have a qualifying life event that triggers a special enrollment period (note here that some special enrollment periods are only available if the person had prior minimum essential coverage, and STLDI is not considered minimum essential coverage.)

Under the terms of the final rule, consumers will still be able to buy another STLDI policy from a different insurer after their policy ends.

But this will depend on their health status, as the new insurer will be able to use medical underwriting.

Marketplace coverage is available

More than 21 million people enrolled in Marketplace plans during the open enrollment period for 2024 coverage. About 92% of them qualified for advance premium tax credits that reduced their average monthly premiums to just $74/month.

These Marketplace policies cover the ACA’s essential health benefits without any annual or lifetime caps on how much the plan will pay. They have caps on out-of-pocket costs, cover pre-existing conditions, and don’t base premiums on gender or medical history, unlike STLDI policies.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org.

The federal government has proposed a wide range of health insurance rule changes for 2025 and – if approved – they’re likely to affect Marketplace enrollment deadlines and plan benefits as well as enrollees’ transition from Marketplace coverage to Medicare.

Two agencies – the Centers for Medicare & Medicaid Services (CMS), and Department of the Treasury – proposed the rule changes in November 2023 and have already accepted public comments on the proposals. The final rule, including potential modifications to the initial proposals, will be published in early 2024.

The proposed rule addresses a wide range of issues. Let’s take a look at six that are most likely to have a direct effect on Marketplace consumers in 2025 and future years:

The proposed rule would require state-run exchanges to more closely align their open enrollment periods with the federal exchange, HealthCare.gov, beginning open enrollment on November 1, and ending it no earlier than January 15. This rule could help reduce confusion for consumers in some states.

Under current rules, the open enrollment period for the federally run Marketplace, HealthCare.gov, (used in 32 states) runs from November 1 to January 15, and most state-run exchanges follow the same schedule.

But state-run exchanges can have different start dates (Idaho’s starts in mid-October and New York’s starts in mid-November) and different end dates, as long as the end date isn’t before December 15. Idaho currently ends open enrollment on December 15, and is the only state where open enrollment ends before January 15.

If finalized, this rule change would require Idaho to change both the start and end dates of its open enrollment period, and New York would have to change its start date. And state-run exchanges created after these rules go into effect would also have to follow the standardized schedule of November 1 through at least January 15.

This proposal is supported by various entities, including the National Association of Community Health Centers, but opposed by other entities, including the National Association of Insurance Commissioners, the state of Idaho, and the state of Georgia (Georgia plans to have a fully state-run Marketplace by the fall of 2024).

The proposed rule would require state-run exchanges to have first-of-the-following-month effective dates for applications submitted at any time during a calendar month during special enrollment periods.

Starting in 2022, HealthCare.gov switched to this approach. Before that, HealthCare.gov and most of the state-run exchanges required an application to be submitted by the 15th of the month for the coverage to be effective the first of the following month. (Some qualifying life events, including marriage, loss of other coverage, and birth/adoption, had more flexible enrollment deadlines.) This meant that an application submitted on June 20 would have an August 1 effective date. But under the protocol that HealthCare.gov and some state-run exchanges adopted in 2022, that application now gets a July 1 effective date.

When HealthCare.gov switched to the new rules under which coverage is effective at the start of the next month – regardless of the day of the month the application was submitted during a special enrollment period – it was optional for state-run-exchanges to also make the change. Some have since adopted the same approach, but others have not.

If the proposed rule is adopted, consumers in every state will be able to get coverage effective as of the first of the month following their application during a special enrollment period, regardless of the date they apply. The goal? Minimizing gaps in coverage by reducing the amount of time that people in some states currently have to wait for their SEP enrollments to take effect.

This proposed rule did not generate much feedback in the public comments, but there were some comments on either side of the issue. For example, it’s opposed by the state of Georgia, which plans to be running its own exchange by the fall of 2024. It’s supported, however, by the Massachusetts Health Connector (Massachusetts Marketplace), which currently requires SEP applications to be submitted by the 23rd of the month to have coverage effective the first of the following month.

3. It would be easier for states to add to their essential health benefit requirements

The proposed rule would make it easier for states to update their essential health benefits (EHB) benchmark plan requirements, and would allow states to add mandated benefits via the regulatory or legislative process without having to cover the cost of the new benefit. (Current rules require the state to pay the cost of adding the new benefits by sending money directly to the health plan or its enrollees.)

Under current rules, states can use the benchmarking process (directly updating the EHB benchmark plan, as opposed to a legislative or regulatory benefit mandate) to add benefits without defraying the cost. But states have reported that updating the benchmark plan is burdensome, and only nine states have updated their benchmark plans since this became available in 2020. ^{If a state adds required benefits via regulatory or legislative state mandates (as opposed to the benchmarking process) after 2011, they have to defray the cost, even if they subsequently add it via the benchmarking process.}

The proposed rule would ensure that if a particular benefit is covered by a state’s EHB benchmark plan, the cost doesn’t have to be borne by the state, even if the state mandated the benefit via regulation or legislation. And separately, the proposed rule calls for a more simplified process for states to update their EHB Benchmark plan, making it easier to add new benefits over time. (States have reported that the current process can be burdensome and onerous.)

To clarify, a state would not be required to make any change to its EHB Benchmark plan or add any new benefits. But for states that wish to do so, the proposed rules are designed to make the process easier and less costly.

There are a variety of services that a state could choose to add to its EHB benchmark plan, including some services that have only become available in recent years, after the original EHB benchmark plans were established (weight loss medication, for example). Other examples are gender-affirming care, vasectomies, infertility treatment, and substance use disorder treatments that have been developed since EHB Benchmark plans were first created.

Among the public comments received, the National Association of Insurance Commissioners strongly supports this proposed rule change, while Elevance Health (formerly Anthem) opposes it.

Self-insured and large-group plans are not required to cover EHBs (and most covered workers are in self-insured or large group plans). But to the extent that they do, they cannot impose annual or lifetime limits on how much the plan will pay for those services.

The proposed rule clarifies that if a state chooses to add adult dental coverage to its EHB benchmark plan and an employer purchases that plan for its workers in the large group market (51 or more employees in most states) ^{the carrier would have to provide dental benefits without annual or lifetime benefit caps. But if a large employer uses a stand-alone dental plan in addition to a medical plan, the dental plan could continue to have benefit caps.}

(For clarification, small-group health plans are sold to employers with up to 50 employees in most states, and up to 100 employees in four states. ^{If the employer has more employees than the small-group threshold and is purchasing commercial insurance — as opposed to self-insuring — they are buying coverage in the large-group market, which is regulated under different rules than the small-group market.)}

States are responsible for determining the specific services that must be covered as essential health benefits, but the Affordable Care Act prohibits states from including adult dental in their EHB package. This is because the EHB package was meant to be representative of a typical employer-sponsored health plan, and employer-sponsored health plans generally do not include dental coverage.

In the proposed rule, the government notes that they’re now looking at this from the perspective of an overall employer benefit package, which often includes separate dental coverage in addition to the medical plan. So while it continues to be the case that employer-sponsored medical plans typically do not include dental coverage, the proposed rule change would allow states to bring their EHB-Benchmark plan more in line with a typical employer benefits package, which often includes both medical and dental coverage.

Quite a few public comments were submitted in response to the proposal to allow states to add adult dental to EHB.

The proposal is supported by the American Association of Endodontists, the National Rural Health Association, the National Association of Insurance Commissioners, the National Association of Community Health Centers, and the Tribal Technical Advisory Group.

But it’s opposed by Sanford and Priority Health (both insurers), and the Academy of General Dentistry.

The agencies clarified in the proposed rule that they are not proposing a change to allow states to add adult vision or custodial long-term care coverage to EHB (both of which are also not allowed to be added to EHB at this point), but they are seeking feedback from stakeholders and the public regarding whether they should consider that in future rulemaking.

The proposed rule would make the low-income special enrollment period (SEP) permanent, instead of ending it if and when the American Rescue Plan’s (ARP) subsidy enhancements expire.

The rationale behind the low-income SEP is that subsidy-eligible enrollees with income up to 150% of the federal poverty level (FPL) are currently eligible for $0 premium coverage, so the adverse selection risk is low. (That means it’s unlikely that a person would let their coverage lapse when they’re healthy if they’re not having to pay for it. Adverse selection refers to situations in which healthy people do not maintain coverage, and the overall risk pool becomes less healthy and more expensive to treat.)

Under current rules, subsidy-eligible applicants with household income up to 150% of FPL will continue to be able to enroll year-round as long as the ARP subsidy enhancements remain in effect. They’re currently in place through 2025, and an extension would require Congressional action. If the proposed rule is finalized, the low-income SEP will remain in place even if the subsidy enhancements end.

The National Association of Community Health Centers supports this proposal, while Elevance Health (formerly Anthem) opposes it. Another insurer, Priority Health, expressed general opposition to the expansion of special enrollment opportunities and wants CMS to “reduce the total number of SEPs,” noting that “ongoing enrollment contributes to adverse selection and encourages healthy persons to delay enrollment until they need care.”

Conversely, CMS and the IRS note in the proposed rules that because most consumers with income up to 150% FPL would continue to be eligible for some zero-cost plans in the Marketplace even without the ARP subsidy enhancements, they “would be unlikely to use the proposed 150 FPL SEP in a way that caused adverse selection.”

Under current rules, the option to retroactively terminate Marketplace coverage is extremely limited. The proposed rule would allow a retroactive coverage termination date if a person becomes eligible for backdated Medicare coverage. .

Once a Marketplace enrollee becomes eligible for premium-free Medicare Part A, they are no longer eligible for premium subsidies. And even if they aren’t receiving subsidies, Medicare doesn’t coordinate with individual/family coverage. The advice from CMS is that “In most cases, you’ll want to end your Marketplace coverage” when your Medicare coverage begins. And consumers are responsible for canceling their Marketplace coverage when they transition to Medicare.

In most cases, Marketplace plans can only be canceled prospectively (or at the earliest, on the day the cancellation request is made). This works well in situations where a person knows that their Medicare will take effect on a particular day in the future and can schedule the termination of their Marketplace plan for the same time. But it becomes much more complicated when a person learns that they’ve been enrolled in Medicare with a backdated effective date.

This can happen when a person is approved for Social Security Disability Insurance (SSDI) benefits with a retroactive effective date more than 25 months in the past. (Medicare becomes available in the 25th month of SSDI benefits.) It can also happen when a person enrolls in Medicare after they’re initially eligible and their Medicare Part A coverage is backdated up to six months.

In those scenarios, the person doesn’t have an opportunity to cancel their Marketplace plan prospectively, since they’re finding out after the fact that their Medicare coverage has already begun. The proposed rule would allow them to request that their Marketplace coverage be canceled back to the day before their Medicare took effect. This could result in premium savings for the individual, and also reduce the likelihood that they’ll have to repay excess premium tax credits to the IRS when they file their taxes.

The proposed rule does not allow retroactive terminations in a situation where an individual enrolled prospectively didn’t understand that they needed to cancel their Marketplace plan once they’ve got Medicare coverage and later tries to retroactively terminate enrollment in a QHP. But it could address some of the challenges Marketplace enrollees currently face when they are retroactively enrolled in Medicare.

If the proposed rule is finalized, retroactive termination would become available via HealthCare.gov, but would be optional for the state-run Marketplaces.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org.