Short-term Health Plans Leave People in Disarray at the Worst Possible TimeAugust 7, 2020
People pay for their health insurance considering that if medical emergencies occur then they will be covered. Individuals who care about their health and financial wellness should take guard, especially right now. A short-term health plan that deceptively markets itself as health insurance was once a niche product that covers people for a few months while they were in between jobs. In 2018, the Trump administration brought changes in the federal rules to allow insurance carriers to sell short-term plans, which were not the same as the standard health insurance and don’t provide the same coverage, to offer coverage for up to three years.
Drawbacks of Short-term Plans
According to a recent investigative report published by the U.S. House committee, it was discovered that short-term insurers often withdraw coverage when patients get sick, and even refuse to cover the most basic medical care. Short-term plans also discriminate against patients suffering from pre-existing conditions like cancer. The committee was discovered that as of last year, around 3 million Americans were covered under the short-term plans, and this number could rise as an estimated 5.4 million laid-off workers became uninsured due to loss of job because of COVID pandemic from February through May.
It is crucial for people shopping for private health insurance plans to understand that short-term plans may not provide the coverage they expect. Short-term plans don’t cover much so these plans turn out to be profitable for insurers. The committee found that because of that, insurers pay lucrative commissions to agents and brokers, who mislead consumers about the coverage.
The revelation made by the Short-Term Plan Study
The Leukemia & Lymphoma Society earlier this year ordered an actuarial firm to study short-term plans. They wanted to know that if someone gets diagnosed with a serious condition like diabetes, cancer, or heart attack while covered under short-term plans, then will they be covered or not. It was discovered that people covered under short-term plans are diagnosed with these conditions are likely to owe 50% to 500% more in out-of-pocket costs compared to patients covered under typical health plans. In most of the cases, the difference is around tens of thousands of dollars.
The Junk Insurance
The short-term plans do not have the latest health insurance benefits, and so these plans are termed by critics as junk insurance. Luckily consumers can take a few steps to protect themselves. First, consumers should always demand the details of the plan in writing, which they are considering to buy and should closely look at the fine print. Short-term plans always come with a disclaimer that it does not comply with the Affordable Care Act or does not provide minimum essential benefits. Such phrases should be red-flagged that this is not typically a health plan.
Consumers should be Vigilant while Shopping for Health Plans
Another thing to note is that short-term plans don’t cover prescription drugs, and if a plan says that it doesn’t cover prescription drugs or its coverage is just a discount card, then it is not an adequate plan. But the fact is that even knowledgeable consumers can become victims of these plans, so they are pressurizing lawmakers in Washington and state capitals to protect them from such insurance products. The short-term plans may leave patients in disarray at the time when they are in dire need of healthcare and medical support. In some cases, people also fall into debilitating debt due to these plans. Therefore, lawmakers should stop the expansion of the short-term plans, so that consumers don’t get trapped in such plans.