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The Truth Behind Cheap Health Insurance – Are Short Term Plans White Scam?

What ‘Short-Term’ Health Insurance Plans Mean

An executive order re-opened the sign-up period for Affordable Care Act healthcare plans for 90 days, beginning February 15.

The sign-up period, also known as open-enrollment, ended in December of last year.

However, the mounting COVID-19 cases propelled the decision to re-open enrollment and, this time, without any qualifying reason (job loss, a divorce, or the birth of a child, etc.) to sign up for coverage outside of regular open enrollment.

President Joe Biden said in a statement that “every American has a right to the peace of mind that comes with knowing they have access to affordable, quality health care.”

The executive order applies to the 36 other states that have the federal government running healthcare marketplaces.

In an effort to curb the expenses that a lot of Americans are faced with in getting checked, treated, or managed at a health care facility, many people are now shopping for health care insurance plans that fit their needs and their pockets. 

However, the warning is explicit against “short-term” health insurance plans.

Granted, “short-term” health plans are way cheaper than the Affordable Care Act (ACA or Obamacare) qualified health plans by around 80 percent. 

However, the kicker is in the coverage. In the long run, “short-term” plans cost more with scant coverage when it is needed the most.

“Short term” plans almost always pay little or nothing at all to cover actual medical needs. Many even exclude a lot of the basics, such as prescription drugs and immunizations.

No Choice: Limited Coverage Or Nothing At All

The U.S. House of Representatives Committee on Energy and Commerce released a report that detailed over a dozen practices that leave the financial and physical health of people enrolled in the plans at risk. 

These practices include dropped coverage, limitations for lifesaving procedures, and poor protections during an emergency.

An alarming practice by most “short-term” plan brokers is using deceptive tactics to get people to enroll in these plans.

Some even go on to assure and mislead potential policyholders that their plans cover COVID-19-related health problems.

While a lot of these are just marketing tactics, a lot of Americans still choose to buy “short-term” plans because it is the only health care alternative they can afford, and to them, it is better than no plan at all.

Around 70 percent of “short-term” plan-holders said that they would have purchased a higher plan with more coverage, and that lasted for more than 90 days if it was available to them.

Confronted with having to pay high premium costs of ACA policies on the one hand and the risk of having no insurance on the other, people make the only economical choice they can and purchase short-term plans.

Imperfect as they are, short-term policies will continue to be popular until and unless meaningful and comprehensive reform can provide the majority of the public with major medical health plans that are truly affordable.

Short Term Limitations Cost More

While “short-term” policies do save people some in premiums, the trade-off isn’t worth it.

They may look and feel like regular plans, but they don’t cover as much as the latter.

Additionally, there is no limit on deductibles which often results in consumers paying up thousands of dollars even before coverage starts.

Some areas that often fall short in coverage include:

  • Women’s health and pregnancy

Maternity and newborn care are not covered in most short-term plans. And those that cover pregnancy often conduct intrusive fact-finding activities.

A lot of these plans are discriminatory towards women and often “avoid enrolling women of childbearing age.”

A House investigation even found out that most short-term policies charge as much as 50 percent more to women than men for the same plan or coverage.

  • Pre-existing conditions

Short-term insurance companies often review applications and look into medical histories of applicants that go back as far as five to ten years.

This can seem very dubious, especially when they use conditions to deny coverage.

A lot of times, it is not even clear what makes a condition “pre-existing.”

Even COVID-19 could be considered as pre-existing if the policyholder was infected, exposed, or experienced symptoms prior to enrolling in a short-term plan.

  • Prescriptions

Basic care such as routine tests, screening, and immunization, as well as prescription drug costs, are often not covered under short-term plans.

  • Provider network

Often, consumers have difficulty finding a provider that accepts their short-term insurance and, if they do, are often denied coverage after approval of service and health professional.

This leads to an even higher cost for the policyholder as he/she has to pay out-of-pocket for something his insurance should have coverage of.

How To Get Better Coverage

Short-term insurance policies are way cheaper, but they also cost more when policyholders need to use them for their medical needs.

Here are some alternatives to getting better coverage:

  • Medicaid

Despite its reputation, Medicaid coverage is broader and more generous than short-term plans.

  • Subsidized ACA plans

Individuals earning up to $51,040, or families of four with incomes up to $104,800, are eligible for reduced rates.

Most receive some kind of subsidy. Those with ACA plans that have someone in the household lost income are qualified for larger subsidies.

Furthermore, those who are ineligible and become eligible during the year will get money back on tax returns.

  • State-run marketplace

There are states, such as California, Massachusetts, and New York, that offer insurance with federal subsidies to lower the premium. Check if your state is one and find provider contact information.

  • COBRA

Those employed in a business with more than 20 employees can continue with their health insurance provided it is paid in full and within 60 days after the employee loses his/her job.

  • Federally funded health clinic or charity care

This may not be health insurance, but you can still get medical care when you need it without the need for insurance, including getting prescription drugs at low to no cost.

Editor’s Note on The Truth Behind Cheap Health Insurance:

This article is created to inform you of the news about cheap health insurance commonly known as short-term health insurance plans.

If you have questions regarding the news and its updates, please send us a message by clicking the ‘Contact Us’ button below. We’d love to hear back from you!

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