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Short-Term Health Insurance

Short-Term Health Insurance

Short term plans are not available in every state. Though federal limitations place the maximum duration for short term health insurance plans at 364 days, many states have instituted their own limitations or banned short term plans altogether.

Currently, it is illegal to purchase a short term health insurance plan in New York, New Jersey, and Massachusetts. California, Hawaii, Rhode Island, and Vermont have introduced so many regulations and limitations that there are currently zero health insurance providers that offer short term plans in these states.

Short-Term Health Insurance: The Basics

Health Insurance for those ‘just in case’ moments!

Short-term health insurance is temporary health insurance designed to bridge coverage gaps between long-term health plans. However, with the rising costs of Obamacare plans some people are choosing short-term plans to replace their Obamacare coverage.

Over the next four weeks we’re going to take a closer look at short-term health insurance to see who it’s good for, what coverage it provides, and whether short-term insurance really is a viable alternative to an Obamacare plan. Let’s start with the basics:

What is Short-Term Health Insurance?

Short-term health insurance is designed to be a “quick fix” for relatively healthy individuals and families. It allows you to still have coverage while you are in between life events or trying to find a long term health care plan that will fit your needs.

Short-term insurance is often only available for a short period of time—generally up to eleven months. Some states also allow you to “stack” more than one plan so you can have coverage for longer. Some plans, however, are not renewable. It works great for those who have missed open enrollment or do not have a qualifying life event that triggers insurance coverage.

The Affordability of Short-Term Health Insurance

One of the best features of short-term health insurance is that it is often much more affordable than long-term plans. It acts as emergency health insurance in case the unthinkable happens while you are in between long-term health plans.

For this reason, it is usually much more cost-effective. In fact, it is often more cost-effective even though the premium subsidiaries available for Marketplace health insurance plans are not available. Premiums for short-term coverage can be less than half of the premiums required for long-term coverage in some cases.

It can also save you from extremely expensive hospital bills if an emergency medical situation does occur while you otherwise would not have had health insurance.

Short-Term Health Insurance and the Affordable Care Act (ACA)

Short-term health insurance plans do not meet the requirements under the Affordable Care Act (Obamacare). That means that even if you have short-term health insurance, you are still subject to the penalties involved for not having coverage.

However, the current laws do allow a small gap in coverage (up to two months) without penalty. Short-term health insurance works great to fill this gap between plans, and you can still avoid the penalty.

What Does Short-Term Health Insurance Cover?

Because short-term insurance does not meet ACA requirements, it does not offer as many perks and features. For example, preventive care has been a huge focus for long-term health insurance plans under the ACA. Short-term plans do not offer the same types of benefits for preventative care that a long-term plan would. Instead of covering checkups, short-term plans cover emergency room visits.

Short-term insurance does not cover preexisting conditions either, which is something that qualifying ACA plans would cover. You may have to undergo a physical examination or fill out a medical questionnaire to receive coverage as well.

It is possible to be denied coverage based on your past medical history or current health. This also means that if you have an ongoing condition that needs frequent medication or doctor’s visits, short-term insurance may not be much help for those types of situations.

Consider an example. Imagine that you have a heart condition. You take medication daily for your condition and you attend monthly doctor’s appointments. Your short-term health insurance would likely not cover your medication or your doctor’s visits. It also may not cover you if you have a heart attack caused by your heart condition.

What it will cover, however, is an emergency room visit that is the result of a lung problem, fall, or accident. Some plans may also cover the heart attack, visits, and prescriptions as well, but you may end up paying more for this type of expansive coverage. Given this example, it is easy to see why short-term health insurance may make a better gap filler than a long-term solutions.

The short-term insurance also likely will not cover maternity or mental health-related medications or appointments. For some, this exclusion can be very important.

How Else is Short-Term Health Insurance Different?

The coverage limitations and the time that short-term insurance is available are the major differences between short-term coverage and regular health insurance. However, there are some other important differences as well.

  • You may have to file your own claims. When you use most health plans, your insurance company will work with the hospital so that you do not have to see the vast majority of the paperwork involved with your health insurance claim. With short-term health insurance, some plans require that you report the claim and that starts their process. In some situations, that may also mean that you have to pay medical bills yourself and then the insurance company reimburses you.
  • Short-term coverage starts quickly. Short-term plans often start much faster than standard health insurance plans. In many cases, you can be covered the day after you finalize your application. This can be a huge advantage for some.
  • When your plan ends, you may not be able to get more coverage. You are limited in how long you can hold short-term health insurance and whether it can be renewed. Even after your short-term plan ends, you may not qualify to get long-term coverage until the next Obamacare Open Enrollment Period. You may still need to have a qualifying life event to get health insurance coverage elsewhere. Plan accordingly!
  • You can drop coverage whenever you want. Although you generally choose how long you want your coverage to continue, you can also drop coverage without penalty in many situations as well. If your new standard health insurance will apply sooner than you thought, you can often just stop the short-term coverage.

While short-term health insurance has disadvantages it is a great safety net! Next week, in Part 2 of our series on short-term health insurance we’ll look at Omamacare vs Short-term plans.

Short-Term Health Insurance Vs Obamacare Insurance

If you missed Part 1 of our series on Short-Term Health Insurance, you can catch up here: The Basics of Short-Term Health Insurance.

Some consumers are using short-term health insurance as an alternative to Obamacare Affordable Care Act (“ACA”) coverage. Short-term health insurance plans are significantly less expensive than non-subsidized plans under Obamacare—sometimes less than half of the cost.
However, they are not “qualifying plans,” which means that consumers still face penalties for failing to have coverage at tax time and cannot get a subsidy towards the premium cost. For some people, the cost of short-term coverage and the penalty is still far less expensive than paying for authorized medical insurance under Obamacare.

Coverage Differences

Short-Term: Coverage for Emergencies

Short-term health insurance acts as emergency medical coverage. You are normally not limited to specific doctors so you can go virtually anywhere in an emergency situation. Short-term health insurance often will not cover things like regular doctors’ appointments or treatment for preventive care.

Short-term health insurance is also, by its nature, short. Most policies only last for one year or less. In some cases, you can renew the policy as long as your health status has not changed, but the insurance company can reject your application if you developed any health conditions in the past year. Customers often move to a different short-term health insurance carrier if theirs will not or cannot renew their policy.

Obamacare Plans: Comprehensive Coverage

Obamacare plans are designed to provide coverage for the major areas of healthcare. This means that each Obamacare plan will provide you with comprehensive healthcare coverage and ensure that you have access to healthcare when you need it, even if you have pre-existing conditions.

In order for a plan to “qualify” under Obamacare or the ACA, it has to offer certain services, including costs for prescription drugs and preventive services. There is a price to pay for these services, however. The average premium for an individual plan is $82 per month, after considering cost assistance offered for some low and middle-income individuals. Coverage ends up costing between 2 percent and 9.5 percent of your total income for most Americans.

Obamacare Vs Short Term Health Insurance

When considering whether to opt for a qualifying plan under Obamacare or a short-term health insurance plan, it is a good idea to weigh the pros and cons. You can use the following chart to help you decide.

Keep in mind that the chart below provides information for most plans, but it may not reflect your particular plan. It is important to read the coverage section carefully for any plan that you are considering.

Obamacare or ACA Coverage Short Term Health Insurance
When can you apply for coverage? During open enrollment or after a qualifying life event Anytime
How quickly does coverage start? Usually within 45 days Usually within 2 weeks (and often within 48 hours)
Can plans be bought on a state exchange? Yes No
Can plans be bought off the state exchange? Yes Yes
Guaranteed Acceptance? Yes No
Health Care Coverage
Ambulatory patient services Covered Covered
Emergency services Covered Covered
Hospitalization Covered May or may not be covered (generally covered in an emergency, but not based on preexisting condition)
Pregnancy, maternity, and newborn care Covered Not covered
Mental health and substance use disorder services Covered Not covered
Prescription drugs Covered Not covered
Rehabilitative services Covered Not covered
Laboratory services Covered Not covered
Preventive and wellness services Covered Not covered
Chronic disease management Covered Not covered (may be grounds for denial of coverage)
Pediatric services Covered Not covered
Birth control coverage Covered Not covered
Breastfeeding coverage Covered Not covered
General doctor visits Covered Sometimes
Preexisting conditions Covered Not covered (may be grounds for denial of coverage)
Subsidies Available to help with premium cost Yes No
Dollar limits on coverage No Yes
Protects from health insurance tax penalty Yes No (2.5 percent of your annual income or $695 per person, whichever is higher for 2016)
Other Key Differences
Network May need to be in network for coverage to apply Generally unlimited (no specific doctors or locations required)
Time constraints None Coverage for up to one year
Is the plan renewable? Yes Sometimes, but renewal can be denied
Filing claims Handled by care providers Policy holder is responsible for filing claims

Why Use Short Term Health Insurance?

In the Marketplace, everyone’s insurance coverage cost is relatively the same because insurance companies can no longer adjust fees as they once could due to preexisting conditions and other health concerns. That means that healthy individuals who do not require much medical care are paying the same premium as those people who see the doctor regularly.

It’s easy to see the benefit of ACA plans for people who see the doctor regularly as their coverage is cheaper than it once was. Generally, healthy individuals simply do not have the same advantage.
Short-term coverage is a way for healthy individuals to pay less for insurance, at least as long as they can renew their short-term coverage plans. It does not offer the same types of benefits, but the key question to ask yourself is how much the more comprehensive coverage of an ACA plan is worth to you?

It’s also important to remember that those who use short-term health insurance will still have to pay a tax penalty for not having approved coverage. Nonetheless, for some people, particularly those who are in the middle-income category, the cost of the penalty may be less than what they would have paid for a qualifying health insurance plan.

Deciding to Use Short-Term Health Insurance

Many people use short-term health insurance as “gap” coverage. That is, they use it as a short-term solution to get them through to open enrollment or a new job. This is undeniably a smart choice when ACA coverage isn’t available. For others, using short-term insurance coverage as long as possible can make sense.

Take a hard look at your financial situation and make a realistic evaluation of your health before deciding whether short-term health insurance or Obamacare is the best fit for you. Check back next week for Part 3 of our series on short-term health insurance: When should I get short-term health insurance?

Cheap Health Insurance with Nationwide Doctor Network Starting at $23.70

Getting good and affordable health insurance is about striking the balance between appropriate coverage, price, and suitable provider networks. As a broker, we know that finding that perfect insurance plan can be a difficult and complicated process. Our job is to make this process easy for you. That’s why we want to share United Health One’s insurance plans with you. Answer 3 quick questions to view all the UHC plans available to you.

United Health One– Short-Term Medical Value Plans: Affordable Health Insurance Options

United Healthcare has a line of incredible affordable individual insurance plans called United Health One. Depending on your age, smoking status, and location, you can find a plan for as low as $23.70! Their cheapest health insurance plans are called Short-Term Medical Value plans. With these plans, you can choose a deductible and coinsurance that suit your budget.

Answer 3 simple questions to see all your affordable health insurance options from United Health One.

Have a look at this side-by-side comparison of covered expenses of short-term medical plans:

$250,000 lifetime maximum benefit:

$600,000 lifetime maximum benefit:

$200,000,000 lifetime maximum benefit:

See Doctors Out of State: Nationwide Medical Provider Network

Since these plans are on UHC’s Choice Plus Network, you can get coverage from a million medical providers and 6,000 hospitals all across the country. That means you typically can use health insurance out of state. These plans will not cover out-of-network providers, however, except in emergencies.

Furthermore, you will not need a primary care physician or referrals to see a specialist. If this is the kind of flexible and affordable health insurance coverage you need, keep reading.

Per Term Deductible Option: Fewer Out-of-Pocket Medical Costs

If you choose to purchase one of the Short-Term Medical Value Plans or Plus Plans, you have the option of changing your deductible from per cause to per term. This means you will have one deductible amount to meet per term rather than having your deductible change with each illness or injury. This option is a way to save money, although it is only available if you pay a higher premium on your plan.

Supplemental Accident Benefit

If you would like to limit your out-of-pocket exposure for accidents, you may consider this option. For a higher premium on any plan, this supplemental insurance can help cover your deductible or out-of-pocket expenses for unexpected accidents. You just need to select a maximum per accident.

Are These Plans Right for You? How to Choose the Right Health Insurance

Although the price and network sound appealing, these plans might not necessarily be the right choice for you. So how do you know what insurance plan is right for you?

We can help you find a plan based on your ideal length of coverage, deductible amount, and out-of-pocket maximum amount. If you’re under the age of 35, you may also want to consider Catastrophic insurance. This coverage starts at around $173/mo and is another great option for affordable health insurance.

If you think you won’t need intense medical services, view the full plan details for these value plans. Furthermore, feel free to fill out a quote form to hear some of your options. If you have any questions, call us and talk to a licensed professional at 212-484-9888.

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