New rules enacted by the Trump administration now allow short-term health insurance for longer than the three-month limitation that has been in effect. The new plans became available in October 2018, with states deciding the length of coverage, which can be as long as 12 months.
So, is a short-term plan good for you? If you’re healthy and think you won’t need much care, you might want to consider one.
In a nutshell, short-term health insurance premiums are much lower than plans under the Affordable Care Act marketplace. Where Obamacare policies can cost several hundreds of dollars a month, a short-term premium can cost less than $100. However, short-term plans are much less regulated and can cover far less.
The new ruling means that short-term health insurance:
- Can have terms of up to 364 days.
- Requires you to repurchase when the coverage period expires.
- Are exempt from comprehensive coverage that is required with ACA plans.
Requirements for short-term health insurance vary from state-to-state. In general, short-term policies do not offer comprehensive coverage, keeping prices low. However, some states regulate short-term coverage, following similar rules as ACA requirements.
At this time, 26 states allow short-term health insurance to provide 364 days of coverage. Others allow 6-month plans, with one state, Montana, allowing 1-month plans. A handful set the limit at 90 days while 8 states do not allow any new short-term plans including: California, Massachusetts, New Hampshire, North Dakota, New Jersey, New York, Vermont and Rhode Island.
What’s Not Usually Covered
Depending on the state and provider, certain care types are generally not covered including:
- Pre-existing conditions
- Mental health
- Maternity care
- Preventive care
According to the New York Times, a study by the non-profit Families USA found that fairly common treatments can have limited coverage such as:
- Treatment for acne or moles
- Injuries resulting from organized sports
- Joint replacement surgery
- Hernia repair surgery
- Cataract treatment
- Treatment for any injury incurred while the patient was intoxicated
- Treatment for chronic fatigue or pain
Families USA research also shows that some plans have odd rules. For example, a plan in Illinois will rarely cover hospitalizations that begin on the weekend.
If you have any health conditions, you’re not likely to qualify for short-term coverage so traditional comprehensive coverage including ACA plans is the better option.
Short-term health insurance has its place and particularly makes sense for healthy people who just need a short bridge of coverage or can’t afford a more comprehensive plan. Buyer beware though. Be sure you know the details of what you’re purchasing, or you could face some coverage surprises.
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