Shannon Culp, COO of Empower Brokerage, sat down with Rita Ratcliff, a licensed agent who’s been in the insurance industry for more than 20 years. For Rita, the number one questions her customers ask is: “Why can’t I buy health insurance that’s affordable, accepted by doctors and hospitals, and is sold by more than one company?”
Consumers Want Affordable Health Insurance Options
The question stems from several problems in the individual market. To start, the enactment of the Affordable Care Act (ACA) made health insurance heavily regulated by the government. They not only subsidized health insurance, but they also put restrictions in place regarding when to get insurance. While this put strain on the consumer, the ACA also put strain on the providers. Doctors and hospitals were not receiving the reimbursements that they wanted. As a result, providers began pulling back and not accepting the plans.
Providers were not the only ones scaling back, however. Insurance companies also began pulling out of the market because they too were losing money. One of the biggest components of ACA is that it covers pre-existing conditions. Though this enabled many to qualify for coverage, it led to an imbalance of sick and healthy people. This imbalance caused many insurance companies to lose money because they had to cover the pre-existing conditions of the sick. With losses escalating, many insurers exited the market, leaving many counties with only one option; in some counties, there are no qualified health plan options.With providers and carriers pulling out, people’s options are dwindling.
The Alternative to ACA: Short-Term Medical Plans
Not only are there so few options, but the options available are, for many, not affordable. However, their are options outside of qualified ACA marketplace. For instance, there are short-term medical plans. These offer both affordability and options. Unlike the small networks in the marketplace, short-term plans enable people to see any doctor and visit any hospital. They are also available year-round unlike ACA plans.
Short-term plans are, however, limited to only three months as of March 28, 2017. To push more healthy individuals towards the ACA market, the government instituted a new regulation limiting short-term plans to only three months. In addition to shorter coverage periods, short-term plans also don’t cover pre-existing conditions. So, any medical issues that arise during a short-term policy will be considered pre-existing conditions after the three months are over. This makes re-application to another carrier for another short-term policy more difficult.
Regardless of its limitations, short-term medical plans are an attractive alternative to people looking for options and affordability. Healthy people who simply interested in covering catastrophic events will like short-term medical plans. With a short-term plan, a person will not go bankrupt if something bad happens. So if you’re looking for something outside of the marketplace, reach out to a licensed agent like Rita Ratcliff and ask them about short-term medical plans!
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This Article Was Updated: 04/24/2024.