Pros of a Short Term Medical Plan
Price and Enrollment
The best part about short term insurance is the price. It is actually affordable; it is probably one fourth of what the premium would be on the Affordable Care Act. The prices are similar to the plans that used to be offered before the Affordable Care Act. Also, there’s not enrollment period, meaning people can get a short term plan anytime of the year. This varies from the ACA, which limits you to the Open Enrollment Period (OEP) or a Special Enrollment Period (SEP).
Providers
For short term medical, you have access to 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 – one of them being their take on pre-existing conditions. Short term medical WILL NOT pay for any health condition that’s pre-existing to the plan. Depending on the state you are in, the short term could go back 6 months to last year it varies greatly. Based on that time frame, pre-existing conditions will not be covered.
Another negative aspect of short term medical is the underwriting process. When you sign up for a short term plan, they will underwrite you and use your medical or health information to evaluate your coverage. The positive is that the underwriting is simplified into about 5 questions; if you can answer them all, then you can get coverage.
3 Month Policy and Tax Penalty
One of the biggest issues with short term medical is that the last administration through a wrench into the mix. Previously, you could buy short term medical for 12 months at a time. Now, the maximum duration for a short term policy is only 3 months. This new rule was meant to drive everyone to the ACA.
Lastly, the tax penalty is the only real negative that doesn’t affect everyone. People without an ACA plan are subjected to paying a tax penalty for not having the standard health plan. Most people with the lowest plan available for ACA can pay about the same price as someone on short term with the tax penalty. Those who might not be able to afford the ACA might be dismissed from paying the tax penalty.
Both short term and ACA can be the right plan for your family and that decision can be hard for you. The best thing you can do in order to make sure you are making the right decision is contacting your agent and let your agent give you a road map on which way to go.
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