Some people turn to short-term health insurance policies to save money. The premiums for these policies are typically 20% or less than the premiums for American Care Act-compliant policies, and that is enticing to consumers. However, people should be wary of these policies for a variety of reasons.
Pre-existing Conditions Are Rarely Covered
ACA-compliant plans are required to cover pre-existing conditions, but the same is not true for short-term health insurance policies. Since short-term health insurance policies are not ACA-compliant, many do not cover pre-existing conditions. People are often turned down if they have been treated for cancer, mental health issues, HIV/AIDS, or a number of other conditions.
Women who are pregnant or intend to get pregnant can also be turned down for a short-term health insurance policy. Insured Americans can also be dropped from policies if they get a condition while the policy is in effect.
Short-term policies often have coverage limits that can lead to high out-of-pocket costs. For example, some short-term insurance policies only allow the insured to visit the doctor three times during the coverage period.
Prescription drug coverage also might be limited or nonexistent. These policies also often exclude mental health services, substance abuse treatment, and maternity care.
Those who need these types of services have to pay for them out-of-pocket or purchase another health care policy.
Expensive Coverage Shortfalls
Short-term policies are sometimes indemnity policies. That means the insurer does not have a network of providers. When insurers do not have a network, they do not negotiate prices with the providers. Still, the insurer sets limits on how much it will pay for services, and the limits set are usually much lower than what the provider charges. This can lead to expensive insurance shortfalls.
For example, the insured might be limited to $1,000 a day for hospital stays, even though a hospital stay costs around $10,000 day. The insured is responsible for everything the insurance company does not pay. In this case, the insured might have to pay $9,000 to the hospital after stashing a single day.
Colleges Aren’t Allowed to Offer Policies
The U.S. Department of Health and Human Services issued a regulation that states that colleges cannot offer short-term health insurance as a form of student health insurance coverage. The reasons listed speak to many of the problems with these policies. Short-term insurance policies:
- Aren’t ACA compliant
- Have severe coverage limitations
- Could conflict with the college’s nondiscrimination policy
- Might not be compliant with federal civil rights laws, such as Title IX
Get the Coverage You Need
Short-term health policies might have lower premiums, but people often end up spending much more than they would with an ACA-compliant policy. It’s important to get a policy that limits out-of-pocket costs. Get help in picking a policy by calling 1-855-614-5057. You can also enter your information and browse for policies online with our handy tool. The online search tool makes it easy to compare policies and pick the best one for your needs.