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Affordable Care Act (ACA) health insurance hasn’t proven affordable in many cases. So instead of taking part in open enrollment, individuals are increasingly opting for short-term health insurance (STM) while they look for a more permanent healthcare solution.
Short-term plans are not for everyone. They’re less suitable for daily use, and more about giving you affordable peace of mind in case of emergencies.As the name suggests, short-term health insurance can start or end quickly. Click To Tweet
This temporary coverage lasts from 30 to 364 days, and it’s not required to match all of the coverage requirements you benefited from with Obamacare plans. Instead, STM plans exclude coverage for pre-existing conditions and may not pay for certain treatments.
So while you understand both the coverage limitations and benefits of STM as transitional healthcare, you’re probably wondering how to actually make the switch. Here’s what the process looks like, and what you can expect while being covered by short-term plans.
Review Your Health Needs from Past Years Before Moving to Short-Term
Before you start the process of actually switching over to STM, you need to carefully consider the kind of coverage you made use of with your ACA plan last year. Because this is temporary coverage, it doesn’t need to legally cover the 10 essential health benefits. Some services you once considered standard you would need to start paying for out of pocket with STM.
Ask yourself: Did I spend thousands on…
- Dental care
- Vision care
- Coverage of pre-existing conditions like diabetes, arthritis, asthma, cancer, high cholesterol, high blood pressure, chronic obstructive pulmonary disease, or congestive heart failure
If anything above is a service you had covered by your last ACA plan last year, you need to carefully consider the cost benefits of making the switch to short-term health insurance. STM plans probably won’t cover those conditions even if you do enroll.
Make a budget for the estimated costs and keep in mind that if you have a pre-existing condition you should be seriously looking for a long-term solution that will help you manage it.
Cancel Your ACA Health Plan for Temporary Coverage
If you haven’t already left your ACA plan, it’s actually quite simple. If you’re canceling the plan for everyone in your household, you can quit coverage online via a government Marketplace website with your login information.
However, if you’re canceling healthcare for just one person, you will need to get in touch with the your health insurer to do it manually. But, there are a few things you should keep in mind before leaving your ACA health plan.
What to keep in mind:
- Understand that when you end your ACA coverage, you can’t re-enroll until the next annual Open Enrollment Period.
- When you request to end ACA coverage, you can set the termination for a certain date. While making the switch to short-term health insurance is generally quick (sometimes instantaneous), it’s best to be safe and coordinate the two.
Pick a Short-Term Plan That Transitions You Off Obamacare
When choosing a short-term plan you need to not only assess your medical needs but your financial situation and how long you plan to use a temporary plan. Keep these three things in mind when choosing a plan and it will keep you focused on choosing the right short-term plan.
Choose what you can afford. You might be worried about a plan with an affordable monthly price and a steep deductible. But, in the case of an emergency, it could be a lifesaver. Some emergency procedures could cost in the hundreds of thousands of dollars, making a $5,000 deductible seem affordable. In fact, a “high” STM deductible can be low compared to ACA plans.
Choose something with a longer term if possible. While these plans are specifically designed to be short-term, consider opting for the longest term possible. Every time you want to extend your coverage, it will need to be reviewed and approved by the provider which is an extra hassle.
But, don’t think of this as a long-term solution. Choose the plan that will get you through this transitional period — something that covers emergencies and other services you want, like a checkup. Balance the price against your needs and use it as a safety net until you secure more permanent coverage.
Review Your STM Plan Info
While your STM coverage won’t be as comprehensive as an ACA plan, the system itself feels familiar. Upon making the switch to short-term health insurance, you’ll still get a service agreement and medical card in the mail which clearly outline the terms and length of your coverage. But, don’t just put this in a drawer until you need to use it. When you get this info in the mail you should immediately:
- Read your Summary of Benefits
- Review everything that’s covered and ask questions if you’re confused
- Mark the last coverage date in your calendar
- Set a reminder to renew your coverage weeks before the deadline
Find Doctors on Limited Duration Plans
The most stressful thing about switching to a new insurance is finding a new doctor. And switching to short-term health insurance, you may think this will be even more difficult. But in many cases, finding a new doctor isn’t so complicated — and you may even be able to keep your current doctor.
That’s because with STM insurance, you generally aren’t confined to plan networks. Instead, doctors are typically paid in cash which incentivizes them to take you on. Just be sure and read your plan carefully to fully understand how to choose a doctor with your new insurance.
Healthcare Costs To Look Out For on Short-Term Plans
With your temporary health insurance, you can expect significantly cheaper payments month-to-month. And now that starting in 2019 there will no longer be an Obamacare penalty for selecting short-term health insurance instead of ACA plans, your short-term coverage will be more affordable than ever.
High deductibles mean you’ll still end up paying for healthcare out-of-pocket at first. Short-term health insurance is still mainly used as emergency coverage — covering unexpected health services and the medical bills that follow.
Since short-term coverage is still largely structured around deductibles, it means you may have to pay for certain procedures up front, or pay high deductibles before the insurer will chip in. That makes it more important than ever to read the fine print of your plan to understand just what kind of costs you can expect — since the Kaiser Family Foundation reports a “typical short-term plan covers a maximum of $250,000 to $2 million in medical care.”
Costs you may need to account for:
- Mental healthcare. KFF reports that 57% of STM insurers cover this.
- Substance abuse treatment. KFF found that 38% of short-term health insurance plans cover this.
- Prescription drugs. KFF identified just 29% of STM insurers that cover these costs.
- Maternity care. The same study did not find a single STM insurer which covered maternity care.
- Some sports injuries. Some plans exclude injuries linked to organized sports.
- Certain common procedures. It varies plan to plan, but some insurance companies won’t cover acne or mole treatments, cataracts, even hernia repair surgery.
Transitioning to Your Short-Term Health Plan
Once your short-term health insurance begins, there’s nothing more to do. Hopefully you’ve begun to schedule visits with healthcare professionals. Keep your insurance card handy and stay covered!
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