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Obamacare Too Expensive? Consider Short-Term Health Insurance

Do you find Obamacare too expensive? Short-term health insurance is both a flexible and cost-saving option for health coverage.

If you’re facing a situation where you’ll be uninsured for a little bit – maybe a sudden job loss or you’ve aged out of your parents’ plan – then short-term health insurance might be just what you need to make sure you’re covered until the dust settles. It doesn’t provide as much coverage as an Obamacare (or Affordable Care Act) plan, but at a much lower ticket price, it’s a good temporary health plan to cover some injuries or illnesses until you find a more comprehensive solution.

Short-Term Health Insurance: Basics

  • Near-Immediate Coverage: It takes as little as 10 minutes to sign up for and can start your coverage as soon as the next day.
  • Flexible Coverage Duration: Depending on where you live and what’s offered, short-term health insurance coverage can last up to 90 days (with the possibility of multiple extensions), and generally has a lower monthly premium than regular insurance coverage. You have the freedom to choose when your period of coverage ends, and you can re-enroll if you need to.
  • Customizable: The plans are customizable to whatever features suits your needs (obviously, the more features or covered services, the more expensive).
  • Cost-Effective: Offers lower premiums than Obamacare plans. You can choose your deductible and you can choose how you pay.

When Does Short-Term Health Insurance Coverage Make Sense?

Short-term coverage makes sense if you don’t want or require all the bells and whistles (and expenses) of a typical long-term insurance plan. For a young, healthy person who just wants to be covered in case of emergency and who doesn’t mind paying the Obamacare penalty, it’s the way to go.

Other situations where it makes sense include when you have a temporary gap in coverage (like when you’re waiting for employer-sponsored health insurance to kick-off) or if you missed open enrollment. There are, of course, other cases where it makes sense to buy short-term insurance.

You can apply for coverage 24/7 online and begin a policy immediately – so if you need coverage quickly and don’t want to go through the hassle, then short-term health insurance coverage may work for you.

When Is Short-Term Health Coverage a Bad Idea?

  • Low Price Comes at a Cost: Monthly premiums are kept low with high deductibles and out-of-pocket expenses.
  • Can Be Rejected Based on Pre-Existing Conditions: Because these plans are exempt from the laws governing the Affordable Care Act, the companies can reject customers based on their medical history or if they take prescription medications.
  • If Paying Obamacare Penalty Is Too Costly: When you purchase a short-term plan you’re still at risk of incurring the penalty for not meeting the minimum health insurance coverage required by federal law.
  • If You’re Pregnant: Maternity coverage is hardly ever included and it jacks up the prices you’ll pay when it is.
  • When You’ve Got a Family with Children: Since a child will see its pediatrician eleven times in its first two years for well visits alone, families with young children might find short-term insurance challenging. The cost of your office copays might negate any savings you’ve managed by choosing a less expensive plan.

“I don’t recommend them to my clients because they aren’t ACA compliant,” says Laura Fulmer Cook, an independent health and life producer. Sometimes, though, it may be your only option.

What About Obamacare?

If you’ve had a qualifying event, you’re able to sign up on the healthcare Marketplace and begin Obamacare coverage once you choose a plan. Otherwise, it’s a bit trickier. If you simply missed the window to enroll in coverage through the ACA or you want to buy additional coverage for an overseas trip, then it’s wise to purchase a few months of protection.

What Will Happen When Obamacare Is Dismantled?

The details of President Trump’s new healthcare plan are still being decided. There have been several bills introduced, debated, and rescinded. One key item that has been consistent through the many iterations of the new plan is Trump’s insistence on removing the mandatory coverage law.

Without a law mandating you to have health insurance coverage, you’re able to be more flexible with your coverage options. You can choose to buy a short-term health plan to keep seeing a certain MD or simply go without health insurance if money is tight (without concerning yourself with having to pay any penalties to the federal government).

What’s clear is that nothing has been decided yet. When it comes to creating a safety net for yourself to avoid huge medical bills, short-term health insurance may be the right (if even temporary) solution.

The views expressed here are those of the author and do not necessarily represent or reflect the views of Healthcare, Inc. and HealthCare.com.

Nicole White: Nicole White is a personal finance writer originally from Pittsburgh and a regular contributor to HealthCare.com. She lives in LA with her family. You can follow her on Twitter: @nwhitewrites

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