Recently, a federal judge ruled in favor of preserving the HHS ruling that allowed Short Term Medical plans to be renewable for up to 36 months. In years past, Short Term Medical plans were available for a period of 6 months to 12 months depending on the state you resided in. When the tax penalty for not having an ACA compliant plan was taken away at the beginning of the 2019 year, Short Term Medical plans started making their own moves with more carriers offering these types of plans and allowing consumers to keep these plans beyond the standard 12 month period.

Short-Term Medical plans provide comprehensive coverage such as hospitalization and surgical coverage and have a max out of pocket to protect the consumer from unexpected medical costs. Generally, a healthy individual with no pre-existing conditions is an ideal fit for one of these plans. Pre-existing conditions are not covered on a Short-Term Medical plan and that is why it is better to look for an ACA plan through the Marketplace. A pre-existing condition is not something that you’ve just been diagnosed with or taken prescription medication for. If you are aware of a health issue that you haven’t consulted a health professional, that is still considered a pre-existing condition because the health issue existed before you took the coverage. That is why healthy consumers or those who have pre-existing conditions that understand their medical conditions won’t be covered are a good fit for these plans.

Most fear that extending Short-Term Medical plan to 36 months will increase the rates on ACA plans because the lower and more attractive rates of these short-term plans will attract the young and healthy. The ACA relies on the young and healthy to keep the costs low on their plans. The ACA already has to insure everyone and anyone who needs coverage regardless of their health status so the claims being filed are higher than they were 10 years ago.

We believe that it goes beyond that. We believe that if consumers used their health plans properly and changed their lifestyles to maintain or improve their health, then less and less consumers will need to rush to the emergency room or become hospitalized. If consumers used their preventive services like they should, used the urgent care instead of running to the emergency room, took advantage of any telemedicine service or even changed their daily diet, we would have more and more consumers who used less and less of their health plans. This would cause claims to decrease which in turn would keep our health rates low.

We also believe that ACA plans and Short-Term Medical plans serve their purpose in the health insurance market. It is the insurance agent’s responsibility to educate their consumer on the differences and the consumer’s responsibility to review all their documents to make sure they understand everything. This will help avoid issues later when claims are filed.