Are Short Term Health Plans Worth It?
Posted on behalf of Rizk Law on Apr 25, 2014 in Consumer Alerts
Many of those who missed the deadline to sign up for Obamacare through the exchanges and are not eligible for expanded Medicaid have chosen to sign up for short term health plans through private insurers, thinking they will receive the same benefits as under the Affordable Care Act.
Short Term Health Plans Are Not What They Seem
Short term health plans are typically aimed at recent college grads, people between jobs, and new employees waiting for group benefits to kick in. They are marketed by major insurers including United Healthcare Services, Humana, some Blue Cross and Blue Shield carriers, and many smaller companies as alternatives to the policies available on the state and federal exchanges.
On closer inspection, the plans provide less coverage and do not have to adhere to the same rules as plans on the exchanges. They can turn away patients who are sick and can refuse to cover pre-existing conditions. They do not have to pay for preventive care and are not required to renew a policy if a patient needs further medical care. If you get sick, the plan may cover you until your term of coverage runs out, but when it comes time to renew, you can be turned away.
Limitations of Short Term Plans
Unlike the Affordable Care Act (ACA) plans, a short term policy will not cover immunizations and routine physicals, outpatient prescription drugs, pregnancy or childbirth, sports injuries, substance abuse treatment, allergies, or kidney disease. The plans come with a $2 million lifetime limit on benefits, a provision banned under Obamacare rules. The short terms plans also do not satisfy the Obamacare requirement that people have adequate coverage, so those who buy them face the same tax penalties as the uninsured.