In late December 2018, Judge Reed O’Connor of the North District of Texas, ruled the Affordable Care Act (ACA) unconstitutional based on a change to the federal tax law that removed one of the health law’s major provisions of requiring all Americans to purchase health insurance or suffer a tax penalty. With the requirement to buy health insurance gone as of January 1, 2019, the judge ruled the ACA could no longer be upheld with a major provision of the law now stripped from existence. He later placed a “stay” on his ruling, meaning the ACA would stay intact until his determination could be heard by higher courts.
Experts have said this makes a greater case for short term health insurance as a health insurance alternative for the millions of Americans who purchase health insurance on their own. With the requirement to purchase an ACA plan gone, and with the law in turmoil, alternative health insurance plans like short term medical insurance offer consumers health plans that are 50 percent less expensive or more.
What is short term health insurance?
- Short term health insurance is temporary medical coverage that provides an affordable alternative in the health care marketplace.
- Individuals can purchase for as little as 30 days or up to 364 days, and renew for two additional years, depending on their state of residence.
- It is meant to serve as an option for those who are uninsured or know they will be without health insurance coverage for a specific period of time.
- Short term medical plans are not for everyone because they are allowed to ask medical questions to qualify individuals for coverage.
- If you have a pre-existing condition you most likely will not be a candidate for short term medical insurance. However, running a quote is free and you are under no obligation to purchase if you decide that an ACA plan is a better fit for your health needs.
Benefits of an ACA Health Insurance Plan
Most of the ACA mandated provisions took effect on January 1, 2014. The provisions included benefits that the government deemed “essential” to any plan and are now required on all qualifying individual health insurance coverage – both employer group insurance and individual health insurance purchased either on the federal exchange or state marketplace or independently. In the five years since, Americans have been receiving essential benefits that include:
- No pre-existing condition limitations
- No rated pricing based on health status
- No gender inequalities on pricing
- Pregnancy, maternity and newborn care (for both before and after delivery)
- Mental health
- Substance abuse services
- Pediatric services that include oral and vision care for children
Plus, individuals receive free preventive care and wellness services which include some of these popular benefits:
- Annual wellness exams
- Colorectal screening after age 50
- Blood pressure screening
- Contraception for women
- UTI screening for women
- Postpartum depression screening for women
- Autism screening for children
- Vision screening for children
How Trumpcare Can End Benefits
If the ACA health reform law is not upheld in the future, free wellness services, screenings, pediatric services and more currently covered by the ACA could go away. One component of the ACA that will have the biggest battle in Washington and during election campaigning is the pre-existing condition clause. Today no one can be turned down for health insurance coverage if they have a pre-existing medical condition, and insurance companies cannot charge individuals with a pre-existing condition more monthly premium dollars. All individuals with a qualifying ACA plan pay the same rate (pricing is based on age and state), regardless of medical history. In fact, a 2018 Kaiser Family Foundation tracking poll find that 75 percent of Americans believe ACA protections for individuals with pre-existing conditions are very important.
Premium subsidies have also been threatened under several GOP proposed bills. One of the most popular features of the Affordable Care Act, financial subsidies that help lower the price of monthly insurance premiums have most likely helped keep the uninsured rate lower than it has been in the years prior to the ACA becoming law. According to Health Affairs, “between 2010 and 2018, the uninsured rate dropped from 16 percent (48.6 million people) to 8.8 percent (28.3 million people).” In 2018, the average premium received by participants was reportedly $77 per month.
Medicaid expansion could also be jeopardized in some states if Obamacare ceases to exist. And these ACA provisions are not just a concern of the individual market. Employer group insurance plans also fall under ACA protections, and any change to the law would affect the employer market equally where applicable.
Affording ACA Marketing Plans
If your household income is between the 100th and 400th percentile of the federal poverty level, you most likely will qualify for a financial subsidy to reduce your monthly health insurance premium costs. Subsidies for qualifying ACA plans can be found at healthcare.gov or through your state’s marketplace exchange. However, for those who are above the federal poverty guidelines, purchasing an individual health insurance policy comes at a larger pain point. A 2018 study by eHealth found that on average, their customers paid $440 per month for an individual policy and family plans averaged $1,168 per month. According to eHealth’s data, the average cost of an individual plan increased 123 percent since 2013, and 174 percent for family coverage.
Short Term Health Insurance In The Interim
Individuals and families who do not qualify for premium subsidies have more options now that the president’s administration has lessened restrictions on short term health insurance plans. When uninsured and looking for an alternative while figuring out a permanent path to health insurance, short term plans can fill the coverage gap. The Congressional Budget Office estimates 1.3 million people will switch to short-term policies by 2023 due to affordability. While short term health plans are not for everyone, they can provide protections for unexpected medical care. It is important to research, compare, and read the plan details and coverage exclusions to determine if a short term health care plan is right for you and your lifestyle. Your health depends on it.