Short-Term Medical Insurance As an Obamacare Alternative

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Short-Term Medical Insurance As an Obamacare Alternative

Family with two children doing morning exercises

Short term medical insurance as an Obamacare alternative is viable but it is a limited time option.  The Department of the Treasury, Department of Labor, and Department of Health and Human Services in October 2016 announced final rules impacting STM and supplemental products. While these rules were passed under the Obama administration, they remain in effect however if you are basically healthy with little to no pre-existing conditions you may be eligible. Just a reminder Obamacare Open Enrollment has ended so you can only enroll in Obamacare if you qualify for a Special Enrollment Period.  You can apply for STM at any time.

Rules Impacting Short Term Medical Insurance

man reviewing rules with magnifying glassStarting on April 1, 2017 Short-term Medical Insurance policies will be limited to 90 day maximum terms.   They will expire on the 90th day and you will have to reapply all over for another short-term policy.   If your policy is written prior to or on April 1, 2017 you can obtain a term greater than 90 days as long as it expires by December 31st.

What can a STM Insurance policy do for you?

Portrait of a smiling doctor in front of his teamA short term medical insurance policy provides more flexibility in coverage benefits and providers.  Some insurance carriers offer PPO networks in their coverage.

Your doctor or other medical providers may be more likely to accept it.

Provides Basic medical coverage but still provides a cost savings option for unexpected medical treatment.

A great temporary option if you are just between jobs or waiting for current policy changes due to a new White House administration.

Limitations of Short-term Medical Insurance

Short Tem Medical insurance is subject to underwriting.  Some people with certain pre-existing conditions may be excluded from coverage.  If you are receiving treatment, including taking prescriptions for a condition, this may be considered a pre-existing condition.  Acceptable and unacceptable pre-existing conditions are different for each carrier.

Most insurance carriers will only allow you to reapply a limited number of times after your initial term ends.

It is not a Qualified Health Plan per the Affordable Care Act.  There may be tax consequences.

You will not be able to utilize a tax credit if you are eligible for one based on your income.  A tax credit could lower the cost of your insurance if you opted for Obamacare.

Someone filling out claim formsSome plans will only reimburse you for medical so you’ll accrue the cost up front and have to submit claims for expenses.  Please examine your policy carefully before you purchase it.

Most plans do not include prescription coverage but it can be added for an additional monthly premium.

Conclusion

Short term medical insurance can be an Obamacare alternative but it’s a limited time option.  After April 31st you will only be eligible to purchase 90-day policies, though.   Short Term coverage provides basic coverage and is not Obamacare which is major medical.  It is also not a QHP so you there may be tax consequences.  However, if you are basically healthy with little to no pre-existing conditions it can still be an affordable and flexible temporary option for 2017. Contact us for further info.


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2017 ACA Annual Enrollment So Far

It’s Only Day 2…

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It’s only two days of 2017 ACA Annual Enrollment so only a short period has gone by but I already have discovered a few areas (headaches…oops did I think that out loud?) that need clarification.   Please see below…

 

 

 

Prices go up!

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It seems almost inevitable, like death and taxes.  Health Insurance rates have gone up.  Also, tax subsidies have decreased. Most people will see at least a 25% increase in their premium rate.  If you have Individual Insurance coverage whether Off or On the Federal Exchange please double-check rates with your insurer or agent.  You can also contact me and I’d be happy to help research your Texas Rates.  Sorry, I don’t have an Insurance Agent’s license in any other state right now.

Many Insurers Have Left The Exchange

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Many major Insurers like United Health One, Cigna, Scott and White,  and Aetna (and some others) have opted not to participate in the Federal Exchange. Others have limited their participation to specific counties.  You should have received some kind of notification from your insurer if there were any major changes or cancellation of your policy.  Check your mail or as always… call me for further info.  (281) 315-9103

Other Options for QHP

choices

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There are still a handful of insurance carriers participating in the exchange and offering Qualified Health Plans including but not limited to BCBTX, Oscar, Molina and some Humana plans. Even though they still participate you should anticipate a significant rate increase.  Again check with your insurance agent or with me if you like.

Also, there are regional options for Qualified Health Plans.  Some plans like Oscar and Molina which are only available in some counties or Accountable Care/self-funded insurers. There are also some Ministry Share plans associated with some faiths. Although the Ministry Share plans are not technically qualified health plans so you may owe a tax penalty at the end of the year.    Make sure to check out these options.

Employers may offer group plans to their employees which qualify as QHP.

Still, many of the “major” insurers are still offering coverage but only off the exchange and directly from them.  However, most of these are not paying Insurance Agents commission for enrollment.  As you can imagine we are reluctant to sell them.  We gotta eat too!  Some agents like myself will help you enroll for a one-time agency fee.  Hopefully, you can budget for this.

Are You Exempt from The ACA Penalty Fee?

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First of all, the fee or “shared responsibility payment” for not having coverage in 2016 is 2.5% of household income or total yearly premium for the national average price of a Bronze plan sold through the Marketplace

Exemptions might be available based on a number of circumstances, including certain Hardships (see attached app with a list of eligible hardships), some life events, health coverage or financial status, and membership in some groups. You should determine if you have a financial status exemption by still filling out and app on Healthcare.gov and obtaining the “Eligibility” document which tells you your status.

For more detailed information please consult with your tax professional.

Avoid a Financial Catastrophe

No one can argue the importance of health insurance during a medical emergency.  If you opt to do without and eat the tax penalty, I still urge you to purchase some type of supplemental indemnity coverages like Cancer, Critical Illness, Hospital or Accident policies.  This might help prevent any future financial catastrophes and provide some peace of mind.  Contact Me  or (281) 315-9103 for more info about what is available.