Short Term Health Insurance Is Not The Same As ACA (Affordable Care Act) Obamacare Compliant Plans
The Affordable Health Care Act was initially proposed because of how many Americans were uninsured. The Marketplace ended its open enrollment, and President Obama boasted that 8 million Americans signed up for insurance before the deadline’s end. However, many Americans are still uninsured because the plans made available through Obamacare are not affordable for many. As such, it seems logical for those caught in this conundrum to investigate the possibility of short-term health plans.
Short-term plans have generally been geared for recently unemployed job seekers and newly graduated college students. Now, however, people with more established lifestyles are investigating these plans as an option to garner health care with the hope of being in compliance with the Affordable Health Care Act. Short-term plans are inexpensive and provide financial protection for health care needs within a period of time specified within the plan, anywhere from 30 days to a year. Monthly rates can be low as $25 per month, co-payment as high as 50%, deductibles up to $7,500, and maximum coverage as high as $2 million. While these plans certainly may benefit the people groups initially targeted, they do not serve as the alternative to Obamacare that uninsured people may be hoping for.
These plans do not conform to the stipulations within the Affordable Health Care Act, meaning that applicants can be denied for pre-existing conditions. In some cases, coverage may be legally terminated following some diagnoses. If major illness occurs during a period of coverage, an attempt at re-application will likely be refused. Regardless of an individual’s health situation within the time of coverage, many companies limit customers to one re-application—two periods of coverage. A person’s eligibility is entirely dependent on the company’s policies. The Affordable Health Care has taken great steps to change this and to prevent the corruption that often occurs as a result of too much power in the hands of the insurance companies. As such, people choosing plans that do not coincide with the Affordable Health Care Act are subject to the policies of the insurance company, whether or not those policies fit the individual’s or family’s needs.
Physicals are not covered within short-term health care plans. Other routine check-ups and preventative measures, such as mammograms, are likewise not included. Preventative health care, being a significant component of the Affordable Health Care Act, must be a priority in finding insurance. The cost of remaining current on all recommended screenings and exams are usually too high for an average middle-class citizen to fund out-of-pocket. The impact from such care, however, can save a great deal more money (not to mention its impact on health even to the point of saving lives). This is precisely the reason short-term plans work for those in life transitions if they are already healthy. Once the period of transition is complete, the individual or family is able to find a more permanent health plan that enables them to affordably benefit from preventative health care.
Some short-term plans may include the appearance of protection from the tax penalty that will be applied to 2014 federal taxes for not being properly insured. Conversely, these plans do not give an insured person the minimum coverage required under the Affordable Health Care Act. Therefore, people with only short-term health care plans are still subject to this tax penalty, due to these plans’ lack of acquiescence with the Affordable Health Care Act. When a short-term plan is chosen for reasons of life transition, that transition will most likely involve a lack of income that will help avoid the tax penalty. People in such situations must research their options and be prepared to enroll in an acceptable plan once they have a solid income. Expanded Medicaid is also an option that can help in these times. For all other people, however, a short-term plan by itself will not be sufficient to avoid the tax penalty, and the other problems therein does not make it an alternative to Obamacare. Rather, short-term plans will cause greater burdens on those insured with them, as they will not be saving money on their most pressing health needs and will be risking their health due to the lack of preventative care.