Short-term Plans – An Introduction
The most drastic change that Americans have experienced last year in the healthcare landscape is the reemergence of short-term health plans. These plans are available in many states of the U.S for as little as $100 a month thereby providing a quick and affordable health solution to people who are between jobs or if they have currently lost their parents’ health insurance and waiting for the open enrollment to start again. So all those who are interested to know what does the short-term health insurance exactly covers and whether this plan will be the right option for them or not can continue reading, as this article is a comprehensive guide to know everything about the short-term plans.
Few Vital Facts
Since October 2018, short-term plans as per federal rules have been allowed to offer coverage for up to 12 months at a time and the coverage can be renewed for up to 36 months. Nevertheless, the maximum short-term policy duration may vary by state. Trump administration made one of the biggest changes to the Affordable Care Act, which was promoting the sale of short-term health plans. The Short-term plans are of limited duration and can provide coverage for as little as a few months to up to 364 days. Short term plans are comparatively cheaper compared to ACA-compliant plans and according to a study by the Kaiser Family Foundation, the Short-term plans cost around 20% less than the premium for the ACA-compliant plan in the same area.
Price is the main enticement of short-term plans but there is a market for short-term coverage too. This plan is good for people, who experience gaps in their coverage and require temporary coverage because they are off their parents’ plan or between jobs, these plans help fill the gaps. Short-term plans are ideal for individuals, who don’t have a preexisting condition, are not pregnant, and are waiting for a long-term health plan to kick in. Individuals who are recent college graduates and are looking for a job and waiting for their employer-sponsored plan to begin at their new employer. These plans are also helpful for those who miss signing up during the open enrollment period, so a short-term plan will help carry you through to the next open enrollment period. This plan is also the last resort for people who don’t qualify for a government subsidy to afford an ACA-complaint plan.
Cheaper short-term plans are designed to appeal to younger, and healthier people or people of any age who wish to save money. Unlike ACA plans, people can sign up for short-term plans throughout the year. The White House had made some vital tweaks to short-term plans to increase their appeal to consumers. People can now use subsidies to purchase short-term plans depending upon their state and income level.
Reasons when Short-term plans can be a Good Option
Find below the three main reasons when generally people sometimes have to choose short-term health plans:
Required coverage for a Short Period of Time
An annual open enrollment period has been created by the Affordable Care Act during which Americans can buy major medical health insurance. However, if one needs coverage outside of open enrollment but doesn’t have a qualifying life event, then short-term plans might prove a good option to meet your healthcare coverage needs. This plan is also a good option for those who are waiting for employer-based coverage to begin.
Doesn’t have a Qualifying Life Event
During Open enrollment period people can sign up for traditional major health insurance and outside this open enrollment period, people need to have a qualifying life event like marriage, child-birth, loss of employer-based coverage to enroll in major medical coverage and therefore, people who need health insurance but don’t have any qualifying event can find respite with short-term health plans.
When traditional major medical health plan is quite expensive
The major medical health plans are generally too expensive even for people who qualify for subsidies and if the price of the traditional major medical coverage is unaffordable for some people then they can have a temporary alternative in the form of the short-term plan at a lower cost.
Short-term plan Coverage
Doctor Office Visits – Insured visiting doctor’s office is generally covered by the short-term plans, though they might need to pay a copayment or an annual deductible. Some short-term plans may limit the number of visits covered with only a copay and the plan may even exclude a certain type of doctor visits.
Emergency Care Benefits – In case if insured receive emergency care without being admitted to the hospital then short-term plans may pay a specific amount for different types of emergency care like ER visits or ambulance trips. For such care, some short-term plans have copayments or insured may only pay a percentage of the cost.
Hospitalization – Short-term plans are mainly designed to provide coverage in case of a critical accident or unexpected injury through cost-sharing may apply. However, coverage for hospitalization varies plan to plan and are generally capped at a specific amount. Even copayment, deductibles, and coinsurance vary by plan.