Proposed rule would allow short-term insurance plans

Citing escalating premiums and dwindling options in the individual insurance market, the Centers for Medicare & Medicaid Services (CMS) on Wednesday released a final rule expanding the availability of short-term insurance plans.

The rule would allow people to enroll in short-term plans for up to a year and renew the coverage for up to 36 months. Critics say the plans offer limited coverage and provide little protection for people with pre-existing conditions.

The new rules take effect in 60 days, just before the next open enrollment period which starts Nov. 1. CMS, which oversees insurance marketplaces created under the Affordable Care Act (ACA), expects marketplace enrollment to shrink by 500,000 next year – and by 1.3 million over a decade – because of the increased availability of short-term plans.

CMS has produced a fact sheet summarizing the rule.