Non-Obamacare short-term health plans on the rise

Americans are looking for lower cost alternatives when it comes to their health care needs. Those who do not need a high demand for medical services to be covered have other options. Even those with some monthly or quarterly medical requirements are fine with a little less coverage if they’re saving enough on premiums. The good news is that alternative plans are here and will continue to grow in demand throughout 2018.

The Trump Administration signed an executive order in the fall of 2017 requiring short-term care plans to be extended from the current 90-day restriction to the full 365 days as before. These types of policies are not there to replace ACA plans, but to give individuals and families more options for their health care needs.

This is great news for millions of Americans who don’t qualify for federal health subsidies and can’t really afford the ACA plan premiums. By freeing up some of your hard-earned dollars, you can put it back into the economy, retirement, college, or whatever you need.

Short-term plans are non-ACA-qualified health plans that are not required to cover pre-existing conditions or certain ACA-mandated Essential Health Benefits (EHB) (Obamacare), which are covered by ACA-qualified plans.

These benefits include:

• Maternity and newborn care
• Mental health and substance use disorder services
• Specific preventive care benefits, such as routine exams, mammograms, cancer screenings, etc.
• Pediatric services (oral and vision care)

Short term plans are a great option without the previous coverages in the policy. Insurance is supposed to be for sudden, expensive things that you wouldn’t normally be able to pay for on your own. Look at your homeowners and auto insurance. They provide coverage for unforeseen and costly risks you can’t afford to take. Short-term medical plans do just that.

The short-term medical plan extension from the current 90-day maximum to a 365-day maximum is effective May 1. After that date, you can apply with an insurance company that offers the short-term plan that does not have the maximum limit of 90 days.

Another drawback for 2018 is the individual mandate. The short term medical plan is not ACA compliant according to the IRS and will be subject to the tax penalty when you file your taxes in 2018. There are other ways around this. You will need to seek out a professional in the field for more information. For tax year 2019, this tax penalty is gone.