If you are looking for affordable health care options, short-term health insurance may be right for you. At Hyers and Associates, we educate our clients about all of their options. Here is what you need to know about this type of insurance.
Short Term Health Insurance Has Changed
Major changes have occurred regarding the availability of short-term health insurance. Until recently, these plans could only be used for a 3 month time period. Now they can be used for much longer.
Now you can purchase a policy that lasts anywhere from 6 months to 3 years depending on the rules in your state. Policies that automatically renew for multiple years eliminate the need for future medical underwriting and possible declines.
The Pros
These policies are designed to cover people that are transitioning from one long-term health plan to another. Usually, they are purchased by young, healthy adults. These individuals cannot or prefer not to purchase more comprehensive insurance through the Affordable Care Act.
Usually they cost less, are available any time of the year, and do not have a limited enrollment period. Most doctors and health care providers will accept the short-term PPO policies.
Also, the policies would typically cover an unexpected surgery or hospital stay. However, there are some situations they frequently will not cover. Your eligibility for a short-term policy is not guaranteed. Your age and health condition are taken into consideration when your application is medically underwritten.
The Cons
There are several factors to consider. For starters the subsidies that are offered by the Affordable Care Act’s comprehensive insurance providers are not offered on these policies. There are no tax credits available with short term health plans.
These do not cover:
- Most preventive care visits
- Pre-existing conditions
- Maternity care or pregnancies
- Expensive prescriptions
And you cannot always renew your policy at the at the end of your chosen term. If your health has changed, you might not qualify. It’s best to have your short term policy end during the Annual Open Enrollment Window. That way you can purchase an ACA plan if you don’t medically qualify for another short term health policy.
Your acceptance is not guaranteed; medical underwriting is required. Major medical insurance might still be your best option depending on your needs.
You’re In Control of Your Insurance Choice
The recent Affordable Care Act changes give you the opportunity to have more control over your coverage. You can decide how much you are willing to spend to get it.
Here are a few questions to consider before buying short term insurance:
- How long do you want your policy coverage?
- What kind of deductibles and coinsurance are you willing to pay?
- What kind of risks are you willing to take?
The new plans are customizable to meet many needs. It can give you some comfort in knowing that if the unexpected happens, you won’t have to cover it 100% out of pocket. So, today you have a lot more control over the insurance you want. It’s also important to note that you decide how much you want to pay for that insurance.
Many of our clients also purchase Accident, Illness and Hospitalization policies along with short (and long term) health policies. These ancillary plans are inexpensive and can bridge the gap when you have large deductible and coinsurance out of pocket exposure.
The Tax Penalty Was Lifted
The other good news is that in previous years the Affordable Care Act assessed a tax penalty to anyone that did not have comprehensive medical insurance. Recent changes have changed that.
As of 2020, there are no longer penalties for not enrolling in an ACA policy. This could change in the future, but it short term plans that last all or most of the year a feasible option for many.
We Can Help You
How do you decide what is the best route for you to take? Get in touch with Hyers & Associates. We can help you sort through the options of what is available and affordable for you. We’ll take the time to answer your questions and point you in the right direction.
Contact us today to learn about your best options.