Guarantee Issue Policy
10 Essential Benefits
Premium Tax Credits and Cost-Sharing Reductions
The ACA offers tax credits to help make the price cheaper. This is for people that are within 400 percent of the federal poverty level. You are also able to get cost-sharing discounts if you are within the 250 percent of the federal poverty level. Cost sharing is in contrast compared to premium tax credits because the discount lowers the amount you pay for deductibles, copayments, and coinsurance.
Cons of ACA Plan
ACA Open Enrollment and Price
The biggest problem with ACA is the Open Enrollment Period (OEP); that is the only time when you can enroll in an ACA plan. Each year the amount of time you have to enroll someone or get enrolled is shorter and shorter. For the 2018 season, it lasted less than six weeks. Although the ACA does offer ways to reduce cost, in general, an ACA plan is pretty expensive due to all that it covers. Most people can’t afford an ACA plan without the advanced tax credits or the cost-sharing.
Market Competition and Very Few Providers
Most states don’t give you many options, and you’re stuck with only 2 options for ACA plans. Since there isn’t much of a variety, a person could get stuck with a plan that might not be the best fit. What is also becoming a bigger problem is the providers. Since a lot of these companies know they can’t make money offering PPO (large national networks) plans, they have shrunk down to HMO (local networks) plans. There are very few providers accepting ACA plans. So we got a lot of people getting ACA coverage, but doctors are only taking a small percentage of patients. This makes it harder to find a doctor who will see you. It could take months in advance to schedule a doctor’s appointments.
Pros of a Short Term Medical Plan
Price and Enrollment
The best part about short-term insurance is the price, which is drastically cheaper than the Affordable Care Act. The price on a short-term plan can save you hundreds of dollars every month. People can get a short-term plan any time of the year due to the fact that there is no enrollment period.
For short-term medical, you have a huge PPO network of hundreds of thousands of providers. This is great for finding a provider in your area and not having to be limited to an HMO network like the ACA.
Cons of a Short Term Medical Plan
Pre-Existing Conditions and Underwriting
Short-term still has its flaws. You do not get guaranteed issue, which means they will underwrite you and search for pre-existing conditions. Depending on the state you are in, they can search anywhere from six months to a year on your previous conditions. They will also not pay for any conditions that you might have had before the enrollment.
3 Month Policy and Tax Penalty
Short-term plans only offer you coverage for a short time; the current maximum is three months. It’s important to note that under the new administration in the 2019 year short-term plans will be able to cover a full year. When not having an ACA regulated plan you are faced with paying a tax penalty. Most people with the lowest plan available for ACA can pay the same price as someone on short-term with the tax penalty. Also, it is important to mention that the new administration has also gotten rid of the ACA tax penalty that will go into effect in 2019.
There are going to be many changes starting in 2019 that may give you a change of view on short-term and ACA plans. Be sure to stay tuned for more information that might change your options for health insurance.