I have had Short Term Medical insurance in my portfolio of marketable products my entire career. In the past, it met a special need. Someone who needs temporary healthcare coverage could purchase one of these policies and insure the ‘gap’ in their coverage from point A to point B. The typical candidate for this policy would be a college graduate looking for a job, someone who just left one job and headed to another etc. This limited type of health coverage has features that are largely banned by the Affordable Care Act but sales of the product around the country are flourishing. Some consumers are grabbing onto this alternative that they say is cheaper than conventional plans sold under the law. And in most cases, they truly are! 
Sales of short-term health insurance are up sharply since the health law’s major provisions took effect in 2014! New sales figures show the temporary policies, traditionally sold to consumers who are trying to fill coverage gaps for a few months, have continued their surge recently-even though people who buy them face mounting financial penalties because the coverage doesn’t meet the ACA’s standards.
Robin Herman, the 34-year-old owner of a marketing firm in San Francisco, bought a short-term policy in December. The monthly cost of her short-term coverage, plus conventional ACA-compliant plans for her two children, is roughly one-quarter of what she would have paid for conventional health plans covering all three of them, she says.
“This is saving me a ton of money for the year,” she said, despite the penalty. Plans that comply with the health law’s rules cost more than her old pre-ACA policy and are “just not affordable,” she said.
Ms. Herman’s new policy, like many short-term plans, doesn’t cover pre-existing conditions, a limitation no longer allowed in full health coverage. Ms. Herman’s plan also caps total benefits at $1 million, another feature prohibited in ACA plans. It doesn’t cover most prescription drugs. To get the plan, Ms. Herman had to qualify as healthy by answering a questionnaire. ACA plans are sold to every consumer regardless of health status.
“This is exactly the kind of coverage the ACA was designed to get rid of,” said Larry Levitt, a senior vice president at the Kaiser Family Foundation. Consumer advocates say they fear buyers don’t understand the short-term policies’ limits, or the risk of penalties that can hit $695 or more for adults in 2016. Some lower-income consumers also may not realize they qualify for federal subsidies that can sharply reduce the cost of ACA plans.
A spokesman for the Department of Health and Human Services said that under federal law, short-term plans aren’t considered individual health insurance, and thus aren’t subject to the ACA’s rules. Some short-term plans can last nearly a year, after which a policyholder must reapply.
We have short term plans through Blue Cross Blue Shield and other companies. Knowing the above limitations, if you are needing temporary coverage, let us hear from you. Simply EMAIL us at info@BentonWhite.com or call any of our staff at 615.377.1212. As we have done for nearly 38 years, we’re ready to EARN your business.
