Availability of short-term health insurance in South Dakota

Yes. As of 2023, there were at least five insurers offering short-term health insurance in South Dakota.

The average monthly premium for a short-term health insurance plan sold in South Dakota was $297.34 in 2022, according to data from IHC Specialty Benefits.

Prior to December 2020, South Dakota law (State Statute 58-17-70(5)) defined short-term health insurance in South Dakota as nonrenewable and with terms of no more than six months. But that changed in December 2020, under new regulations that the South Dakota Division of Insurance finalized.

The new regulations remove the six-month cap and nonrenewability rules. Instead, plans are allowed to follow the federal rules that the Trump administration finalized in 2018: They can have initial terms of up to 364 days, and total duration, including renewals, of up to 36 months.

But insurers have the option to impose stricter limits, and some of the short-term plans available for purchase in South Dakota are limited to a maximum duration of no more than 12 months.

At least five insurers offer short-term health insurance in South Dakota as of 2023:

• Allstate Health Solutions (National General)
• American National (Standard Life)
• Everest Reinsurance
• Pan-American Life Insurance Company
• United States Fire Insurance Company

Sanford’s short-term SAFEGUARD plans became available in South Dakota in 2020, but the company discontinued them in late 2022.

Short-term health insurance in South Dakota is available to residents who meet insurers’ underwriting guidelines. Typically, this means being under 65 years old (some insurers put the age limit at 64 years) and in fairly good health.

Short-term health insurance plans usually include blanket exclusions for pre-existing conditions, so these types of plans are not adequate for someone who needs medical care for ongoing or pre-existing conditions.

If you’re in need of health insurance coverage in South Dakota and open enrollment for ACA-compliance plans (November 1 – January 15) has ended, check if you are eligible for a special enrollment period that would allow you to enroll in an ACA-compliant major medical plan

If you’re eligible to enroll in an ACA-compliant plan, you can visit the South Dakota exchange/marketplace (HealthCare.gov) to apply. These plans are purchased on a month-to-month basis, so you can enroll in a plan even if you only need coverage for a few months before another policy takes effect (with a premium subsidy if you’re eligible).

An agent or broker can provide information on coverage options and costs for short-term health insurance and determine which will policies best fit your needs. Some things to keep in mind are the allowable plan durations (some of South Dakota’s insurers generally cap their plans at shorter durations than the maximum the state allows), whether the insurer offers guaranteed renewability, and the specific benefits the plan covers.

Pay attention to things such as whether the plan covers outpatient prescription drugs (most short-term health insurance plans do not, but some do), and whether it imposes specific dollar limitations on services such as inpatient care, surgery, etc. (in addition to the plan’s overall benefit maximum).

Excluding coverage for pre-existing conditions can make short-term policies appear more affordable than ACA-compliant (Obamacare) policies. However, that upfront affordability disappears if you end up paying out of pocket for healthcare services related to an uncovered condition. That said, there may be situations when enrolling in a short-term plan might be an attractive option, such as:

• 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 are newly employed and have a waiting period until you can be covered by your new employer’s health insurance plan; short-term insurance is typically a much more affordable (but less comprehensive) stopgap than COBRA or an ACA-compliant plan.
• If you will soon be eligible for Medicare and don’t have access to any other coverage in the meantime.
• If you’re not eligible for Medicaid or a premium subsidy in the exchange, an ACA-compliant plan might be unaffordable. Although the American Rescue Plan and Inflation Reduction Act have greatly enhanced premium subsidies and made them more widely available (through the end of 2025), undocumented immigrants cannot use the exchange. And there is still a coverage gap for people under the poverty level in South Dakota until July 1, 2023, when Medicaid expansion takes effect in the state.

South Dakota short-term insurance policies used to be subject to state regulations that were more restrictive than federal rules, but that changed in late 2020. Prior to late 2020, short-term plans in South Dakota were limited to six months terms and could not be renewed.

South Dakota statute requires insurers who provide short-term health insurance to provide a disclosure informing consumers that the plan does not cover pre-existing conditions, and does not count as minimum essential coverage.