Short Term Health Insurance Plans – The Good & The Bad
While a short term insurance plan is certainly not a long-term option, the main purpose of choosing these types of plans is to provide coverage in interim periods between long term plans. A few examples when an individual would sign up for a short term plan would be if they are in between jobs, beginning graduate school, or are looking for a new plan after one plan has come to an end. It is important to note that according to ObamaCare, or the Affordable Care Act as it is also known more officially, a short term health insurance plan is only a temporary option. It should not be used as a permanent and or reliable form of long term health care. The reason behind this is that there are limitations to short term health care.
According to Obamacare, not having compliant health insurance can result in a tax penalty fee. When it comes to short term health insurance plans, they are considered to be non-compliant with the Affordable Healthcare Act. They are not considered minimum essential coverage. For this reason, they should again only be considered as a temporary option. Yet, regardless of being non-compliant with Obamacare, this does not mean that short term health insurance plans are useless. They still offer an affordable option for many individuals that are seeking long-term insurance options, have missed open enrollment, or that are exempt from the tax for income reasons.
Short Term Health Insurance – Guidelines For Eligibility
When choosing a short term health insurance plan, another important factor to consider is whether or not you are eligible for the plan. According to Salle Mae Inc which offers a short term insurance plan which many short term insurance plans are similar to, there are a number eligibility requirements for short term plans. For example, eligible individuals are 2 through 64, they are not pregnant or expecting fathers, they are not members of any other insurance plans at the time of the short term plan, they are not a member of the armed forces, they are able to answer no to the medical questions on the application, and the there are no pre-existing medical conditions.
The issue of pre-existing medical conditions is perhaps one of the most serious for insurance seekers. To clarify, a pre-existing medical condition is one that was treated or existed before the coverage application. If a pre-existing medical condition is not serious, then there is a possibility that the short term health insurance plan will not be denied to you. However, if it is a medical condition such as cancer oor heart disease, this will lead to immediate denial.
Current Trends In The Healthcare Marketplace
When it comes to short term health insurance plans, there are currently a number of trends occurring in the United States.
- Average Cost, Deductible, Duration
In an article written by Yahoo Finance, a report released by the nation’s largest private online health insurance provider was discussed. The main crux of this report discussed what short term health insurance members and families can expect to pay for the plan per month, their average deductible, and the average duration of most plans. The current price trends are around $69 per month for individuals and $160 per month for families, the average deductible is $2,961, and the average maximum duration for most short term insurance plans is around 6-7 months.
- Employers and Employees
More employers and their employees are being encouraged to opt for short term health care costs if the duration of the contract is only for a short period of time. This mainly applies for temporary workers and short-term contracts.
- Temporary Coverage and Affordable Healthcare Act
Finally, some short term health insurance plans, such as HSA America, want to ensure that every American that wants health insurance has health insurance coverage by implementing special short-term health insurance plans. As of now, the health insurance provider has helped over 27,000 Americans attain coverage as they apply for the Affordable Healthcare Act’s coverage. Just a few of their popular interim plans include supplemental accident plans, prescription drug discounts, and lab imaging discounts. This plan is built to aid many that are seeking a great solution between their periods of coverage.
Short Term Health Care Plans – The Benefits
As with any plan, there are benefits and there are disadvantages involved. The benefits that individuals can expect from a short term health insurance plan are as follows:
- Low Cost
Individuals that choose short term health insurance can expect to enjoy from the low cost alternative to long term health insurance. For instance, as stated above the average cost is $69 per month per individual and $160 for families. These low costs are also beneficial to older individuals that are at the retirement age.
- Quick Approval
Those that are interested in short term health insurance plans can expect to be approved the next day, should they meet the eligibility requirements.
- Short Term Coverage
Not everyone needs long term health insurance, and this is one of the main advantages of a short term plan. Those that choose short term options can decide on plans that are anywhere between 30 days to 12 months, depending on the plan.
- Gap Periods
Not being covered in between jobs can result in major disaster. Short term health insurance plans are a perfect way to keep yourself covered when you have no other coverage options.
When being aware of your options, short term health insurance plans can be in your best interest.
Short Term Health Care Plans – The Disadvantages
As with everything, there are always disadvantages involved. Below are a few of the disadvantages, most of which cannot be avoided.
- Preexisting Conditions
Unfortunately, short term health insurance does not cover preexisting conditions. This leaves a number of people unable to have short term health coverage and thus susceptible to risk.
- Non-Compliant with the Affordable Healthcare Act
Because short term health insurance does not qualify as a health care plan, those that do sign up for short term health insurance may find themselves the recipients of a tax fee.
- No Essential Health Benefits
As short term does not always mean that you can receive essential health benefits, this section is further evidence that is always useful to know exactly what the plan involves.
- Selection of Doctors
Depending on the plan, there may be a limit on the selection of doctors that you can choose from. This again means that it is vital to be completely aware of what the plan offers you.
Is a Short Term Health Insurance Plan Right for You?
Deciding whether or not a short term health insurance plan is in your best interest can be quite difficult. When choosing a plan then, the best thing to do is assess options, understand what the plan offers, and to determine how long you will need the plan. For those that are looking for a plan in between jobs, during grad school, or while searching for a new plan, a short term health insurance plan is certainly better than being uncovered, despite the additional tax fee due to the Affordable Healthcare Act.