August 2018 Healthcare Forum: Deficiencies in Short-Term Health Care Plans

For August, Dr. Lazarus and Dr. Foster were going to continue the discussion about choosing the best Medicare plans for your needs. Because the Trump administration is allowing the re-introduction for 2019 of short-term health insurance plans that are much cheaper (about 1/3 the cost of ACA policies) but provide much less health benefits, we will focus on this important development.

Deficiencies of these short-term plans include the following:
  1. They usually don’t cover pre-existing medical conditions.
  2. They may or may not include such benefits as maternity services, mental health and substance abuse treatment, and prescription drugs.
  3. Some, but not all policies, provide coverage for 364 days, to distinguish them from ACA policies (365 days), and may be renewed for up to 36 months (if the insurance company is still in business.)

The BlueCross BlueShield Association and the America’s Health Insurance Plans warn that these slimmed-down policies “have the potential to harm consumers.” If you rely on these short-term insurance plans with limited medical benefits and yearly payouts, it will be unfortunate if you became seriously ill because coverage may be inadequate. Some New Mexicans may be willing to gamble, figuring if they get very sick with an illness that’s not covered, they can switch from their short-term policy to an ACA policy via HealthCare.gov (the Federal website) or BeWellNM.com (the New Mexico website). But this won’t work unless you can plan to get ill between November 1 – December 15, which is the open enrollment period in most, but not all, states. These short-term insurance plans won’t be sold through the federal health care exchange (HealthCare.gov) but will be advertised through newspapers and social media.

Those Who May Be Suitable for A Short-Term Insurance Plan:
  1. Those who are relatively healthy, can’t afford an ACA plan, or don’t qualify for a federal subsidy to reduce the cost of the ACA plan. It may be a better alternative than no insurance at all.
  2. Those who are retiring before being eligible for Medicare (age 65).
  3. Those who are switching jobs before obtaining insurance from their new employer and not eligible for insurance via COBRA.
  4. Those who need insurance after turning age 26, at which time they are no longer insured under their parents’ policy and are very healthy.
Precautions to Take Before Deciding on A Short-Term Policy:
  1. Read all the fine print, especially regarding health conditions covered/not covered and yearly limits on money paid out by the insurer. If the yearly payout is less than $300,000, it may not be enough to cover a serious illness.
  2. Be wary of insurers whose names you don’t recognize. Some may not be in business next year. Check on the insurer’s rating at A.M. Best Co. (www.ambest.com); call 1-800-424-2378 or 908-439-2200 or Standard and Poor’s (www.standardandpoors.com – Americas; call 1-877-772-5436, option 4).
  3. Have a knowledgeable friend or family member study the entire short-term policy, especially the fine print, and compare it with the more comprehensive ACA policy.
  4. Don’t sign up for any policy after a 5 to 10 minute telephone discussion with a high-pressure sales agent. Insist on seeing the “whole policy.” If it’s not sent, your precaution is rewarded.
  5. If you are planning on starting a family, choose a policy that includes maternity benefits.
  6. If a policy is so cheap and looks too good to be true – it’s truly NOT for you.
  7. Compare any short-term policy you are considering with an ACA policy. If you and your family have serious medical problems, qualify for a federal subsidy to help pay the insurance premiums, want peace of mind, and can afford it – then go for the ACA policy.

Please send us questions about this month’s forum or other problems you are grappling with about getting quality care from our complex healthcare system. Answers to some questions will be posted next month. We’ll respond personally to other questions if you provide your email address.

Please post questions/comments below, and follow and Like us on Facebook at: www.facebook.com/QualityAffordableHealthcare. We cannot answer questions about your personal medical issues because of medical/legal restrictions and because they are best addressed by your doctor.

If you have family members or friends you think may benefit from our monthly healthcare forums, please forward this to them. If they would like to regularly receive our forum, they can sign up on our mailing list below.

For September, we’ll discuss strategies for choosing the Medicare plans best for you.

 

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