Last month, the Trump administration proposed a new alternative to the Affordable Care Act. The news sent shockwaves across the country, as many experts began to discuss how this decision would impact millions of Americans. So today, we’re going to take a closer look at this announcement and deconstruct the headline.
What is this new alternative?
On February 20, the Department of Health and Safety announced a new proposal to extend the duration of short-term insurance plans to 364 days. Americans could then bypass the federal or state-based marketplaces and purchase a plan that virtually lasts an entire year.
Under the current model, short-term insurance plans only last up to 90 days. They tend to attract young Americans who don’t have pre-existing conditions and provide what many experts call “gap coverage,” meaning it’s not viewed as a long-term solution.
As previously mentioned, this proposal bypasses Obamacare, which means that insurance companies can discriminate against applicants with pre-existing conditions.
Before the Affordable Care Act, insurance companies could reject applicants if they battled a severe illness in the past. For example, a middle-aged woman who conquered breast cancer 10 years ago could get her health insurance application rejected. This is because insurers view this woman as a liability because her cancer may return, and that would be costly for the company.
Impact on Obamacare
It’s no secret that Obamacare premiums have increased dramatically over the years, meaning the Affordable Care Act is no longer affordable or accessible. Coupled with the President’s decision to slash the marketing budget of the bill by 90 percent, the future doesn’t look too bright.
These extended short-term plans would attract millions of young, healthy Americans away from Obamacare plans because they’re a lot cheaper. As a result, a disproportionate amount of unhealthy individuals would remain using ACA plans, therefore driving up the price of premiums.
Disadvantages of short-term plans
Also, short-term plans are different from annual plans when it comes to coverage. The former doesn’t provide mental, maternity, prescription drug or preventative care.
Short-term plans differ from annual plans in terms of coverage. The former does not cover preventative, maternity, mental health, and prescription drug coverage, meaning you’ll still have to pay out of pocket. According to CNN, these plans can also come with annual or lifetime limits, which is capped at $1 million. So if you exceed this maximum, the insurance company will force you to pay the outstanding balance.
It’s clear the health insurance landscape is changing rapidly in this country, and short-term health insurance plans seem like an interesting alternative. If you’re thinking about purchasing one of these plans, give one of our agents a call at 855-614-5057 or visit HealthQuoteInfo.com.