How to Compare Short-term Health Insurance Plans

Welcome to the post-Obamacare world.
Not really. But for the rest of the year, we are in the post-open-enrollment world.
The initial Obamacare open enrollment period ended on March 31, so unless you have a “qualifying event” (birth, divorce, marriage, loss of employer benefits) you cannot set up an individual health insurance plan on or off the “exchange” until the end of the year.
The only individual health insurance option is a short-term health insurance plan. While these plans don’t have all of the bells and whistles that some Obamacare plans have, they provide very solid catastrophic protection against major healthcare expenses at a much lower price.

There are a few variables that influence price:

1. Deductible. This is what you pay if something happens before the insurance begins paying benefits. The lower your deductible, the higher the price of the plan.
(Note: at least one major insurance company out there will have you pay a separate deductible for each occurrence, rather than paying a deductible for the year as is typical. So if you break your leg in month one you’ll pay the deductible, and if you get sick in month three you’ll pay it again. We prefer plans with one deductible.)
2. Coinsurance. Once the deductible is met, the plan pays 80% (“coinsurance” is the technical term) of expenses, meaning you pay the remaining 20%. You’ll find plans that pay 50% or 70%, or that have an option to pay 100% after the deductible is met.
Any plan worth having will cap your payments at a “maximum out of pocket” amount. On the plan we use most (with a company called HCC), that max is an additional $1,000 beyond the deductible. You can find plans that raise that amount significantly.
3. Copay. It is nearly impossible to find a short-term health insurance plan with a doctor visit copay. One of the main reasons we use the plan we do is that it does provide a $50 copay for an urgent care center visit. (Note: this is NOT an ER visit – think of something like Doctors Care).
4. Policy Length. Most plans will cover you for up to 6 months. Another reason we prefer coverage with HCC is that you can choose a policy that will last up to 11 months. That can be important for a lot of people.

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It’s worth repeating: Short-term health insurance plans are almost always a lot cheaper than the plans available under Obamacare.
One of the reasons is that these policies can still do a little bit of underwriting – i.e. they can decline applications if you have certain pre-existing conditions (generally “big stuff” like diabetes, cancer in the last 5 years, etc.). If you have questions about the underwriting, ask us and we’ll get you an answer.
Short-term health insurance plans are a great way to get a safety net to protect yourself from major medical expenses at a significant savings over Obamacare plans. And, like we said, outside of open enrollment, they’re really your only choice.
Got questions? Let’s talk:

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