A very important thing happened in 2019 that many people are not aware of. Like him or not, President Trump got rid of the individual tax penalty for not having qualified health insurance for individuals which was a part of Obamacare.
This means, that you are no longer required to have a qualified health plan from the health insurance market place if you don’t want to. As a matter of fact, you are not required to have any health insurance if you don’t want it.
Of course, we don’t recommend you go without some coverage because it is dangerous. If you were to get into a serious accident or illness, the medical bills can bankrupt you without proper insurance.
This is where short term medical plans come into the picture as a good alternative to health insurance marketplace plans.
Like with all things, there are pros and cons and it is important to understand your benefits before taking any policy.
In general, short term medical plans are better for people who are healthy and are not eligible for the tax credits under Obamacare because unlike marketplace plans, most short term plans will either not cover pre-existing health conditions or may cover them to a limited amounts. And they will not include any routine physicals nor any maternity benefits.
1. Premiums: The health insurance rates for short term medical is significantly lower than the marketplace plans. You can save up to 50-70% depending upon the insurance company, the type of plan, deductibles and benefits associated.
2. Larger Networks: Short term medical plans usually have a much larger PPO type networks of doctors and hospitals than most marketplace plans which mostly use HMO networks.
3. Apply Anytime: You can apply for short term medical plans anytime of the year unlike marketplace plans which require you to apply either at open enrollment which is from Nov 1st to Dec 15th or in special enrollment situations from loss of group coverage, moving to new area, gaining new immigration status, marriage, divorce, etc.
Not all states allow the sales of short term medical plans but most do making this a very viable option for people who are looking to save some money on their health insurance costs. If you are not in Georgia, please check your state requirements with your broker.
These health plans have been around for a very long time and were mostly used by people who were in between jobs, benefits or for children who came off their parent’s health insurance and needed something for just a few months.
With the adoption of Affordable Care Act, we were limited of taking these plans to 3 months at a time with one extension. But now, you can keep a short term medical plans up to 364 days in a year. Some companies are currently offering rate guarantees for up to 3 years.
Because all insurance companies have plans that vary, you will have many options on the type of policy you can choose from. Some may offer office visit co-pays,prescription drug cards and accident riders. Be sure to understand your benefits before signing up. You don’t want nasty surprises at time of claims.
I personally decided to go with a short term health plan for our family in 2019 for some of the reasons mentioned above. The biggest was the premiums!
The cheapest marketplace health plan I could find for our family of 3 was coming to around $1306/mo. I was able to find a similar short term plan for $534/mo with a $5000 deductible with a savings of over $770 per month.
This worked out well for us. We didn’t get office visit co-pays and routine physicals as part of covered benefits, but we didn’t mind paying for those costs out of pocket. And the savings of $770 per month definitely helped more than enough to cover those costs.
Short term/catastrophic plans are generally better for healthy individuals and people who are NOT eligible for the tax credits and subsidies from the health insurance marketplace.
If you are eligible for the tax credits, you may not save as much money and you may have access to richer benefits on the marketplace. But it may be worth checking both options.
If you have health conditions that require on going continuous healthcare, you may want to stick to the marketplace plans as they will cover all of your pre-existing health conditions. Also, if you need maternity benefits, you will be better served on a marketplace plans.
The current rules allow you to keep a short term medical plan for up to 364 days at a time. If your health is good and you would like to renew your policy, you can renew the policy and have a new policy begin on the 365th day so there is no lapse in coverage.
The challenge we sometimes face is when a person has had an accident or illness that requires on going treatment. Some health insurance companies are not required to renew your policy especially if they do cover any of the pre-existing conditions. If they are not covering pre-existing conditions, they may renew your policy but your previous illness or accident will not be covered.
This is why we recommend we purchase policies from Jan 1st or 2nd to Dec 30th or 31st. The reason for this is that if you have had health situations that require on going treatment, we can consider one of the marketplace plans at the end of the year and switch you to a plan that will cover all of your health conditions.
Yes, you can take short term health insurance plans anytime throughout the year. They do not have special enrollment rules like the marketplace health plans.
Can You Take Short Term Health Plan for just a couple of months?
Yes, you can take a short term health plans from one month to 364 days consecutive. In fact, short term health plans were initially designed for people who were in between jobs,in waiting periods from the employer benefits or just came off parent’s group health insurance and were waiting for employer benefits to kick in.
But over the last year with the changes individual tax mandate where there is no penalty for having qualified health coverage anymore,more and more people are flocking to this type of coverage in order to save money and have some basic coverage.
Yes, many short term plans will give you an option for a limited number of office visits per term with a co-pay. Typically, it will be one visit per quarter with a co-pay of around $50.
If that is important to you, please be sure to compare the rates between the plans that offer the co-pay and the one that doesn’t because if the price difference is more than the co-pay per quarter, you might be better off without the co-pay options. Would you like to pay for coverage as needed or pay higher premiums for something whether you use it or not?
NO. As of now, we have not seen any short term health plans offer routine preventive benefits. But of course as things change, it could be possible and a welcome benefit.
You can use the following links to get quotes if you are based in Georgia and apply online also. But we recommend you talk to us first so we can assess your situation and recommend the plan and company that is right for you.
United Healthcare/Golden Rule Quotes