Like Your Short Term Health Insurance Plan? Here’s How to Keep It

Editor’s Note: This 2017 blog post outlines coverage duration changes to short term medical plans. Since the post was written the coverage duration changes have been overturned. Today consumers can purchase temporary health insurance plans for a minimum of 30-days and a maximum of 364-days, depending on state-specific rules. 

For an estimated one million people, short term health insurance has proven to be an affordable alternative to Obamacare. Until recently in many states, you could purchase a short term medical plan with coverage lasting anywhere from as little as one month up to as long as 364 days.

However, a new joint ruling from the Department of Health and Human Services, Department of Labor, and the Internal Revenue Service, now limits the coverage period of short term health insurance policies to 90 days. Government officials say that the ruling aligns with the Affordable Care Act provision which requires most people to pay an individual mandate penalty if they go for more than three months without minimum essential coverage.

Keep Your Short Term Health Plan for More than 90 Days

Health insurance plays an important role in helping protect your financial security.  Recognizing that many people would like the option to keep their short term health insurance for more than 90 days, Pivot Health is now offering the opportunity to purchase up to four 90-day policies at one time. The policies run consecutively so that as soon as one policy ends, the new one begins. You can receive up to 360 days of coverage, with no need to reapply or answer medical questions after your initial application. And if your circumstances should change, you can cancel your coverage at any time with no penalty.  

What is Short Term Medical Coverage?

If you’re shopping for insurance alternatives to Obamacare, it may be worth your time to learn more about short term health insurance. Also known as short term medical coverage, this type of plan provides health care benefits for a specific period of time. Similar to a major medical plan, when you have a short term health policy, you visit your doctor for health care services. You have deductible, coinsurance and co-payment amounts. Unlike a major medical plan, though, short term health insurance is limited in duration and does not provide the minimal essential coverage benefits that the Affordable Care Act requires for you to be exempt from paying the individual mandate penalty.  

Short term health insurance premiums tend to be much less costly than exchange plans for a couple of reasons. First, with short term health insurance, you may choose benefits that best fit your situation, rather than purchasing a plan that provides coverage you may not want or need. Second, when you apply for a short term health insurance plan, you will need to answer some medical history questions, and pre-existing conditions may not be covered under your plan. As a result, younger, healthier individuals are often key buyers of short term medical plans.

Premiums for short term health insurance plans are often so low that even with the individual mandate penalty, many find that they still have the coverage they need for less than the cost of an individual plan purchased on the health insurance exchange.

Is Short Term Health Insurance Right for You?

A short term medical insurance plan might be a good choice if you need health insurance for a limited period of time because you:

  • Missed the annual open enrollment period for health insurance exchange plans
  • Are temporarily unemployed
  • Want a different choice than COBRA
  • Lost coverage from your parents’ plan
  • Don’t receive group insurance coverage from your employer
  • Are waiting for your employer-sponsored health care benefits to begin
  • Don’t qualify for a special enrollment to purchase insurance through the health insurance exchange  
  • Are uninsured due to life circumstances

Further, in states which did not expand Medicaid under the Affordable Care Act, there are millions of low-income Americans caught in the “Medicaid gap.”  If you are one of these people, you know that your income is too high to qualify for Medicaid benefits, but it is also too low to receive tax credits and subsidies to help pay for insurance plans purchased on the exchange.

If you find yourself in any of these situations, you can be assured that with short term health insurance, you have an affordable medical coverage solution that helps protect your financial security until you are able to select a permanent medical insurance plan.  

Benefits and Features of Short Term Health Insurance

Short term medical insurance provides you many benefits and features at a very affordable cost.  Let’s take a closer look at what makes short term health insurance a good coverage option for so many people.

Receive up to a $1 million maximum benefit per covered period, with coverage for items such as:

  • Comprehensive benefits coverage – doctor office visits, medical services and treatment, surgery and hospitalization, emergency care, lab tests, prescription drugs costs and more
  • Specialty care services –  extended care facilities, home health care, physical therapy and mental health services
  • Medical transportation – local ambulance or air transport

Enjoy flexibility with plan features including:

  • Coverage start date – decide when you want coverage to begin, anywhere from 24 hours to 30 days from the date you apply
  • Length of coverage period – choose coverage from 30 to 90 days per policy; if you purchase up to four policies at one time to run consecutively, that results in a maximum of 360 days of coverage
  • Deductibles – select from a broad range of choices, to best meet your needs
  • Prescription drug coverage – decide if you want to include this feature with your short term health insurance
  • Premium payment – pay for your policy monthly, or pre-pay for the entire duration of your policy
  • Provider choices – enjoy the freedom of visiting any doctor or hospital you want; there are no provider network restrictions

Access to non-medical benefits such as:

  • Unlimited telemedicine consultations – connect directly with a doctor at whatever time or day works for you; telehealth is available 24/7, for you to speak with physicians who can diagnose and provide you prescriptions in just minutes, at a lower cost than a standard office or urgent care facility visit
  • Discounted vision services – save between 15 to 30 percent on eye exams, frames, lenses and contacts
  • Savings on prescription drugs – enjoy discounts up to 70 percent off prescription medications at thousands of pharmacies across the country

So Why Was Short Term Health Insurance Limited?

People who understand the benefits of short term health insurance might be wondering why the government decided to limit policies to a 90-day coverage duration.  The ruling was passed in late 2016, shortly after exchange plan premium increases for 2017 had been announced.

In the time that the Affordable Care Act has been the law of the land, the health insurance exchanges have struggled with enrolling younger, healthier individuals, and premiums have skyrocketed with national average increases in the double digits, year after year.  As a result, short term health plans, which have significantly lower premium costs than exchange plans, have grown in popularity.  More than 50 percent of short term policy buyers cite price as their reason, as opposed to 39 percent who said they purchased just for temporary coverage.

Proponents of the ruling hope the move will help improve the financial outlook for Obamacare exchange plans.  Short term medical plans require medical screening, which usually results in a healthier pool of insureds, and therefore a lower premium rate.  By limiting the coverage duration of short term medical plans, the government hopes to draw those healthier people to enroll in the individual exchange plans.  If more healthy individuals enroll in the exchanges, they will help balance out the less healthy people who have already enrolled, and in theory, premiums for exchange plans should decrease.

However, critics are concerned that the new ruling will result in people ending up uninsured, by not enrolling in exchange plans when their short term medical plan coverage ends.  Several organizations, including the National Association of Insurance Commissioners, have publicly voiced their concerns about the new ruling.

Particularly in the 19 states which haven’t expanded Medicaid under the terms of the Affordable Care Act, short term medical plans have been a popular and affordable health insurance choice for low-income individuals.  Some industry experts fear that insurance shoppers who are primarily motivated by price may look at the higher premiums and deductibles of the exchange plans and decide they can’t afford them, then simply go without any coverage.

Short Term Medical – Affordable Coverage

When you’re deciding what type of health insurance plan might best meet your coverage and budget needs, keep short term medical in mind.  Although it is not permanent major medical coverage, it may be able to offer you a coverage solution that works well for you today and for a period of time to come.