Plans popular for those in between jobs but don't cover
pre-existing conditions
June 3, 2015 | By Dori Zweig
Experts predicted the popularity of short-term health insurance plans would
drop after implementation of the Affordable Care Act but there is renewed
interest in the coverage, according to Kaiser Health News. However, the
plans may have some unforseen risks.
Consumers often purchase such plans if they're in between jobs and need
coverage that focuses on unpredictable accidents, the publication noted. The
plans typically come with low premiums but in return include no coverage for
pre-existing medical conditions. Short-term plans also interest those who
missed the ACA sign-up deadline or who can't find more, affordable coverage.
EHealth--the nation's largest online health insurance broker, which suffered a
financial blow from the launch of the ACA's insurance exchanges--offers
consumers the chance to see disclaimers for short-term plans.
The site warns that short-term plans, which consumers can purchase in
increments of 30 days to 12 months, are exempt from most ACA provisions. For
example, insurers can reject consumers for coverage if they take prescription
medications or have health conditions--a policy that the ACA prohibits for
other plans, noted KHN.
EHealth also pointed out that the average premium for short-term plans is
about $110 a month for an individual, with a deductible of $3,589. For the
younger population, plans average $89 a month; federal subsidies are not
available since the plans don't qualify as ACA plans.
Many health insurance brokers believe individuals purchase short-term plans
because they fall into the coverage gap, earn too much to qualify for Medicaid
or don't received enough subsidies to cover typical insurance, according to KHN.
While brokers admit the policies work well for younger, healthier
consumers, many believe they're not worth it. "I refuse to sell it to
someone in lieu of Obamacare," Susan Lundy of Benefits by Design, a
brokerage in Larkspur, California, told KHN. She added an additional
warning: "if you break your leg and you get a new policy six months later,
they have an exclusion on the break."
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