November 1st to December 15th is Open Enrollment. This is the period of time each year when individuals and families who don’t have health insurance through an employer, Medicare, Medicaid, or other sources, can enroll in medical insurance plans for next year. Previously, under the Affordable Care Act (ACA) regulations, short-term plans could be offered for a maximum of 90 days, and only young people or those who could afford no other insurance could purchase them.
Last year the federal government changed the rules. Short-term medical insurance plans can now be used for up to 12 months with possible renewals up to a maximum of 36 months. People of any age can purchase them.
Key points to know:
Short-term plans are less expensive than ACA-compliant plans. Insurance companies can charge less because they can choose which health benefits they will provide, and they can deny people with pre-existing medical conditions. ACA-compliant plans are not allowed to deny coverage for pre-existing conditions.
Short-term plans are low-coverage plans. While they can provide some coverage for emergencies, they don’t cover basic care, and they are not required to cover the 10 essential health benefits which are mandatory in ACA-compliant plans: preventative and wellness services, emergency services, laboratory services, maternity and newborn care, prescription drugs, ambulatory patient services, rehabilitation services, hospitalization, mental health and substance abuse disorders, and pediatric services.
Short-term plans can cap the amount they will pay for your care each year, limit how much they will spend on specific services, and have lifetime limits. This means, if you unexpectedly need medical care and it costs more than the plan will pay, you will be responsible for the rest of the bill. If your plan doesn’t cover the specific care you need, you are on the hook for the entire bill.
Short-term plans are not available everywhere. They cannot be sold in certain states. Other states limit these plans to six months or less. Some states permit the initial one year coverage, but limit the total plan duration.
These plans are not recommended for people with chronic or pre-existing medical conditions, who are planning to start a family, or who want wellness visits and screenings such a mammograms and colonoscopies.
Know what you are buying. If you are considering a short-term health insurance plan, carefully read the fine print. Since short-term plans can pick and choose what services they cover, you will want to know exactly for what the plan will and will not pay.
Know in advance how you will pay the bills if you have unplanned medical expenses which your health plan won’t cover or caps how much it will pay. Unexpected medical events do happen, and the bill could be thousands of dollars.
When you buy a short-term plan, the insurance company is required to send you a disclosure which explains how short-term plans differ from regular health insurance.
Before signing up for a short-term plan, you may want to learn whether you can qualify for help to purchase an ACA-compliant health insurance plan, which would make such a plan more affordable. Information, instructions and applications are available at HealthCare.gov.
This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice. Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.