Short Term Medical Plans: The Obamacare Alternative

Obamacare Alternative

Rodney Culp, CEO of Empower Brokerage, has been helping people find affordable health insurance for the past 32 years. In those 32 years, he’s never seen a time that was more tumultuous than this year. Because of rising premiums, evident during this Open Enrollment season, it’s important that individuals know their options when shopping for health insurance. Watch the video below to learn about an Obamacare Alternative, that may save you and your family some money this year!

As 2016 ends and 2017 begins, a lot of consumers we work with have seen rising premiums. In fact, in Texas, the average rate increase from the largest carrier in the state is over 50%. For some families, the rate increase has caused the premiums to go from $5,000/year to $7,500/year. The fifty percent rate increase is becoming quite a challenge. As such, many of the plans that we sell to families are a lot more expensive than even $7,500/year. Because it’s an expensive item, we help consumers find alternatives to purchasing Obamacare or an ACA plan.

While we offer Obamacare plans, we want to also offer alternatives that provide the coverage they want but is within their budget. One of those alternatives is short term medical (STM). These are like an Obamacare Alternative. STM plans are not qualified ACA plans. Because it’s not qualified, a consumer can be subject to a penalty. However, there are a couple reasons why people might want to buy a STM plan despite having to pay the penalty.

Reasons to Consider a Short Term Medical Plan

The first reasons depends on the cost for a qualified plan versus a STM plan. For some, it may make sense to purchase a STM plan and pay the penalty. This alternative may still provide people the coverage they like that in some ways is better than a qualified plan. Also, unlike a qualified plan, the STM plans will let you go to any doctor or any hospital. This removes the worry about remaining in-network. Ultimately, even with the penalty and the premium, consumers can often find an affordable STM plan with similar coverage to an Obamacare plan.

Lastly, because the cost of health insurance is so high, consumers can go without an ACA plan and not pay the penalty. Since the premiums are so high on the Obamacare plans, many consumers, whose income places low on the Federal Poverty Level (FPL), won’t have to purchase a qualified plan. In other words, if the premium for an Obamacare plan exceeds 8.5% of their annual income, then they can purchase a plan that’s not a qualified plan. Furthermore, they would not be subject to the penalty because the premiums are so high on the Obamacare plans.

Since insurance is oftentimes overwhelmingly confusing, we want to shed light on this industry by answering YOUR questions.  So if you have any questions or concerns, comment below and your question may be the topic of our next video!

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