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.