Availability of short-term health insurance in Alaska

Yes, short-term plans are allowed in Alaska, and at least two insurers actively market short-term policies in the state as of 2023.

The average monthly premium for a short-term health insurance plan sold in Alaska was $376.13 in 2022, according to data from IHC Specialty Benefits.

There are no state-specific regulations pertaining to the duration of short-term health insurance in Alaska, so the state defaults to the federal regulations.

Insurers are allowed to offer short-term plans with initial terms up to 364 days and the option to renew for a total short-term plan duration of up to 36 months, although this will change if the Biden administration’s proposed rule change is finalized.

Until late 2018, federal rules limited short-term health plans to three months, and prohibited renewal. But the Trump administration relaxed those rules.

Alaska Senator Lisa Murkowski expressed cautious support for the new rules in 2018. Murkowski noted that although it’s clear that short-term health plans are not as robust as ACA-compliant coverage and have a variety of limitations, thousands of Alaska residents had been priced out of the regular major medical market and that short-term coverage would essentially be better than no insurance coverage at all for those folks.

But it’s worth noting that the American Rescue Plan and Inflation Reduction Act have temporarily (through 2025) eliminated the “subsidy cliff” and made ACA-compliant coverage more affordable than it used to be.

At least two insurers offer short-term health insurance in Alaska in 2023:

• Moda Health Plan (plans are limited to 185 day terms)
• United States Fire Insurance Company (3 consecutive 364-day policies available)

As of 2018, there were five insurers that were licensed to sell short-term health insurance in Alaska. But the Alaska Division of Insurance confirmed that just two insurers — Moda Health Plan and Independence American Insurance Company —were approved to sell short-term health insurance as of 2021.

As of early 2021, neither of those insurers was actively marketing short-term plans in Alaska, and that had been the case since sometime in 2020. But by late 2021, Moda Health had short-term plans available on its website for Alaska residents to purchase. Those plans were still for sale as of 2023, and United States Fire Insurance Company was also offering policies as of 2023.

Some national websites dedicated to short-term health insurance only have fixed indemnity plans available for Alaska; note that fixed indemnity plans are very different from short-term health insurance in terms of plan design, although neither type of coverage is regulated by the ACA.

Short-term health insurance in Alaska can be purchased by applicants who can meet the underwriting guidelines the insurers use. In general, this means being under 65 years old for the entire time the plan will be in effect, and in fairly good health.

Short-term health plans typically include blanket exclusions for pre-existing conditions, so they are not adequate for residents of the Last Frontier who need coverage for ongoing conditions. Short-term plans are not required to cover the essential health benefits, and many of them do not include coverage for maternity care, mental health care, or prescription drugs.

If you’re trying to purchase health insurance coverage in Alaska outside of the annual open enrollment period (November 1 to January 15) for ACA-compliant major medical plans, first check to see if you’re eligible for a special enrollment period that you could use to enroll in a plan through the exchange (marketplace) in Alaska.

Special enrollment periods are generally triggered by qualifying life events. But some people, including Native Americans/Alaska Natives and people who are subsidy-eligible but earn no more than 150% of the poverty level, can enroll in coverage through the exchange year-round.

During open enrollment or a special enrollment period, residents can enroll in ACA-compliant individual market coverage. These plans, offered in Alaska by Moda and Premera, are purchased on a month-to-month basis, so you can enroll in ACA-compliant coverage — with a premium subsidy if you’re eligible — even if you only need the plan for a few months until Medicare or an employer’s plan takes effect.

There are some situations in which short-term health insurance is the most realistic or the only option, including:

• If you missed open enrollment for ACA-compliant coverage and do not have a qualifying event that would trigger a special enrollment period.
• If you’ll soon be enrolled in Medicare and need a temporary plan to cover you in the meantime.
• If you’re newly employed by a business that has a waiting period before healthcare benefits take effect.
• If you’re losing an employer-sponsored plan mid-month, and your new coverage (either through the marketplace or through a new employer) won’t take effect until the first of the following month. Note that COBRA might be available as a fall-back option in this scenario instead, since COBRA coverage is retroactive once you sign up for it.
• If you’re not eligible for Medicaid or a premium subsidy in the exchange for an ACA-compliant plan. For people who don’t receive premium subsidies, the monthly premiums for ACA-compliant coverage are more expensive in Alaska than they are in many other states. This makes affordability a significant factor for people who aren’t eligible for subsidies or for Medicaid under the state’s expanded guidelines.

People who are not eligible for premium subsidies include:

• Those who earn too much to be eligible for a subsidy. But that’s much less common than it used to be, thanks to the American Rescue Plan (ARP). The ARP eliminated the “subsidy cliff” through 2022, and the Inflation Reduction Act has extended that through 2025.
• People who are not lawfully present in the U.S. and thus ineligible to use the exchange/Marketplace.

The Alaska Division of Insurance confirmed that while the state does not have benefit mandates for short-term plans or limit the duration or renewability of short-term plans, there are some state-based rules that short-term healthcare plans must follow. These include rules relating to prompt payment of claims as well as the state’s 80th percentile rule for out-of-network providers (note that Alaska regulators are considering eliminating the 80th percentile rule in 2023, due to the implementation of the federal No Surprises Act). Rates and forms for short-term plans must be filed with, and approved by, the Alaska Division of Insurance.

In 2015, Alaska Insurance Commissioner, Lori Wing-Heier, issued a press release about a short-term product that was being fraudulently marketed in the state. The notice included information about the drawbacks of short-term plans.

The Alaska Division of Insurance has since reiterated the need for caution when consumers are considering short-term plans.