Looming Health Coverage Lapses Bring New Scrutiny to Short-Term Insurance

Dec 17, 2013, 10:47 ET from HealthPocket

SUNNYVALE, Calif., Dec. 17, 2013 /PRNewswire-USNewswire/ -- Given that exchange technical glitches have produced insurance enrollment problems, some consumers may turn to the short-term insurance market to address temporary lapses in health insurance coverage despite new rules from the administration to minimize these lapses.

HealthPocket examined short-term health insurance in the newly released study, "5 Myths about Short-Term Health Insurance," and illuminated some of the major differences between short-term health insurance and traditional health insurance regulated under the Affordable Care Act. Some of the most important differences include:

  • A short-term plan is temporary coverage, typically lasting between a month to a year
  • Short-term plans evaluate applicants' health status and medical history before approving an enrollment as opposed to Affordable Care Act plans that will enroll applicants regardless of these issues
  • Short-term premiums are typically lower than health plans compliant with the Affordable Care Act but offer fewer benefits
  • Enrollment in a short-term health plan does not shield consumers from the 'uninsured' fine since short-term plans are not considered creditable coverage under the Affordable Care Act

The evaluation of an applicant's health status and medical history by short-term insurers limits the relevance of these health plans to a niche market of healthy consumers without pre-existing conditions. Short-term health plans are offered widely across the United States and are accepted by many doctors. As is the case with traditional health insurance, short-term plans can employ a network of medical providers to deliver care so people with need of a particular doctor or hospital should confirm a specific short-term plan's acceptance before enrollment.

"At this time of uncertainty with state and federal marketplaces, a short-term medical plan may make sense for some people facing a health insurance coverage lapse for a limited period of time," said Jeff Smedsrud, co-author of the study and president of Healthcare.com, "but these consumers should understand the restrictions and the rules of these plans before enrolling."

HealthPocket.com is a free website that compares and ranks all health insurance plans available to an individual, family, or small business to allow consumers to make their best health plan decision and reduce their out of pocket costs. HealthPocket uses only objective data from government, non-profit, and private sources that carry no conditions that might restrict the site from serving as an unbiased resource. The founders of HealthPocket.com spent decades pioneering internet-based access to health insurance information and created HealthPocket to offer an online resource to positively change how people buy and use healthcare in the U.S. Learn more at www.HealthPocket.com.

For further information, please contact Emily Cashel with Shirley & Banister Public Affairs at (703) 739-5920 or (800) 536-5920, ecashel@sbpublicaffairs.com.

SOURCE HealthPocket