What are some of the best features of short term health plans?
Insurance has always been confusing. The advent of the Affordable Care Act, or its popular name, Obamacare, has raised many questions.
Individuals and families can purchase insurance directly from any credible insurance company. Prior health conditions cannot be used to deny coverage.
In addition, insurance for older people cannot be more than twice the cost of insurance for younger people.
The difference shows up in the level of coverage a person wants. Do they want a low or higher deductible? This will determine the amount of the monthly premium. Do they want prescription coverage or other specialized coverage? How much of a co-pay are they willing to pay, 20 percent, 30 percent, more, or less.
As with any system, there will be times when unusual issues must be understood. For example, a person may not qualify for subsidized insurance through the Affordable Care Act, but wants to have some coverage for a number of reasons, such as waiting for a group policy to become effective or expecting to start a job with benefits very soon.
Some people turn to short-term insurance. As a rule, short term insurance has a low premium, but a high deductible that could go into thousands of dollars per person. Short-term insurance policies, as the name would imply, are normally not renewable.
In most cases, short term insurance does not meet the minimum requirements set forth by the Affordable Care Act. As a result of that, those persons purchasing short term policies may also have to pay a fine for not having insurance that does meet the standards set forth in the Affordable Care Act.
Individuals who missed the Obamacare sign-up deadline have other options. They should contact local insurance agents to discuss any other options that might be available.
The Affordable Care Act did several things:
- Provided for a subsidized insurance plan for people unable to afford full coverage.
- Set forth minimum standards that all health insurance policies must meet.
- Prohibits anyone from being turned down because of prior health conditions, which was a major problem for older people who have lost their jobs and their group coverage.
- Prevents insurance company from charging excessive rates for older clients.
Short-term policies can be issued for as few as 30 days to six months and sometimes longer. These policies usually do not cover routine physicals. They exclude coverage for conditions that have been diagnosed or treated within the past three to five years. They also have lifetime limits on benefits, which is now prohibited under the health care law.
“If you are concerned about coverage in the event of a terrible accident or a new diagnosis, then yes” (for short term policies), said Marian Mulkey, a director at the California Healthcare Foundation. However, these policies are not uniform, and it is vital to read carefully all provisions of the policy.
If you go to the emergency room, see a doctor, get a prescription filled, or suffer an injury, the short-term policy may be of little benefit. If you are in a serious accident, the individual will still have a large out-of-pocket deductible to pay. Furthermore, the extent of the coverage will be capped.
People can get insurance, even if it is not through Obamacare. It is best to check with a number of local insurance companies to see what plans are available.
Advantages of short term health insurance:
- You can get coverage in as little as a day.
- You can get coverage up to six months and sometimes an extension of another six months.
- The premiums are affordable.
- You can prevent gaps of over 63 days during waiting periods at a new employer.
Disadvantages of short term health insurance:
- Coverage dollar and time limits may fall short of your needs if you become ill.
- Features tend to be lean rather than the rich packages available as comprehensive, long term coverage.
- The key is to know what traditional coverage is available and to understand what the short-term policies offer and do not offer.