Whether you are looking into purchasing health insurance for the first time or switching policies, navigating the landscape with all the changes in the last 10 years can be confusing. Two options you may have come across are short-term health insurance and ACA health insurance options, but what are the differences between the two and which is right for you?
Short-Term Health Insurance: A Temporary Solution
Looking at short-term insurance can be very attractive considering how low their premium payments are, but short-term health insurance plans have some major drawbacks. Among these are very high deductibles which lead to large out of pocket payments and limited coverage in general on essential services.
The Affordable Care Act laid out 10 essential health benefits that are required for minimum health coverage. Short-term health insurance plans do not fall under the ACA regulations at all so many of them do not meet these requirements. Another consequence of short-term plans, since they do not fall under ACA regulations you may be denied health coverage for preexisting conditions or you may pay a higher premium as a result.
However, there are some benefits to a short-term health insurance plan. The plans are quick to sign up for and quick to start coverage. Enrollment is also available 365 days a year. Because of these benefits, short-term care plans are useful for bridging gaps in coverage such as being between jobs or searching for a new permanent coverage option.
Affordable Care Act Plans
The Affordable Care Act plans are required to cover the 10 essential health benefits and must provide coverage to people with preexisting conditions. These plans are permanent health insurance options that can last much longer than the 1-12 months of most short-term health plans.
The drawback of the ACA health plans is that the sign up is limited to open enrollment periods or if you qualify for a special enrollment period usually through a qualifying event. There is also a delay of several weeks between signing up for an ACA plan and receiving coverage through it.
Which Plan Should You Choose?
ACA plans are typically better more comprehensive coverage and should be chosen for permanent health insurance. However, in cases when you need temporary health insurance to cover catastrophes until you can find a permanent provider short-term health insurance plans can work as well.
Empower wants to help you get the best insurance for your needs and the most for your money. We want to help you stay on top of your health.
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