Insurance Commissioner proposes rule for restrictions on new short-term medical plans

In a significant move to protect consumers, Washington State Insurance Commissioner Mike Kreidler has proposed a rule limiting short-term limited duration medical plans to no more than three months, with no options for renewal. The proposal aims to ensure that consumers understand the limitations of such plans while establishing minimum coverage standards to prevent destabilization of the individual health insurance market. Kreidler highlighted that while some individuals may need temporary coverage, these short-term plans should not be viewed as substitutes for comprehensive health insurance. Insurers will be required to provide disclosures that clarify coverage limitations and prompt consumers to explore eligibility for more robust options through Washington's Health Benefit Exchange. Furthermore, the proposed regulations mandate that short-term plans must cover major medical expenses with a minimum total payment of at least $1 million, and they cannot impose excessive pre-existing condition waiting periods.

The rules also set consumer coinsurance limits and require prior approval for application forms and rates by the Office of the Insurance Commissioner. Kreidler's office aims to balance the need for temporary coverage with the necessity of maintaining a stable insurance market. A public hearing is scheduled for September 26, 2018, to gather feedback on the proposed changes.