Short Term Medical – Up to 3 Years of Coverage.
Short Term Medical Insurance can provide up to 3 years of coverage for a significant savings over a permanent ACA Policy. Available all year round!
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A Robust ACA Alternative
Short-term medical Insurance plans are similar to ACA plans in many ways. They usually have a deductible, coinsurance, and an out of pocket maximum. One thing that sets many short-term policies apart is their total coverage maximum, meaning the total amount the policy will pay out within a given year or the life of the insured. For example, some short term medical plans will provide robust coverage with up to $1 million in benefits per year. Others will provide $5 million for life.
Deductible & Coinsurance
Like Obamacare / ACA Plans, short-term medical policies have a deductible, which is the amount you are responsible to pay before insurance benefits start (for example, $5,000 deductible). Preventative services are often covered separately. After meeting your deductible, you then go into the coinsurance phase, which is where you pay the coinsurance percentage for all remaining medical bills up to the out of pocket max.
Out-of-pocket-maximum
Coinsurance for short term plans can range from 50/50% to 100/0%. The latter example would mean that the insured pays their deductible and then the plan pays 100% after. Similarly, if it was an 80/20 plan, then the insured would be responsible for 20% of all medical bills during their coinsurance phase. After paying the coinsurance up to the maximum-out-of-pocket amount, the insured pays nothing for the remainder of the year. This continues up the the coverage limit for the period or the policy.
Like ACA Plans with an Expiration Date
The cost of short-term medical insurance is up to 50% less than ACA / Obamacare plans, which makes it an attractive option for people who can qualify medically. While ACA insurance plans are required to accept everybody, short-term medical companies reduce risk by limiting enrollment from those with certain health conditions, and the application process involves underwriting in the form of a health history questionnaire.
Another reason short-term medical insurance is more affordable is they often exclude coverage for maternity, drug rehabilitation, and some other services. For this reason, those who are pregnant or expecting would usually be advised against short-term medical.
Going to the doctor with a short-term medical plan is just like going with your ACA PPO plans. You will show your insurance card to an in-network doctor and you’ll pay the co-pay or office visit fee (depending on your policy). There are no reimbursements or cash pay requirements as with some other private insurance plans.
Someone who is in good health has the option of purchasing short-term medical for 3 year blocks in Florida, providing major medical coverage for a significant discount. If after the 3 year term, they are still able to pass the health questions, they would have the option of purchasing another 3 years of coverage. If they could not pass underwriting, they would need to enroll in an ACA plan since ACA accepts all pre-existing conditions, usually at a much higher price.
This strategy allows people to take advantage of the lower cost of private health insurance as long as they can qualify medically. It’s usually not advised for those who make less than $58,000 per year as individuals since they will often qualify for an ACA subsidy. Those with the option of purchasing group insurance through their spouse’s employer are usually advised to do so if finances allow. Otherwise, short-term medical may be a solution.
Finally, short-term medical insurance policies are not “bottomless”. They usually have limits of $1 million to $5 million. While these can be an enormous amount of coverage, it is theoretically possible to run out of coverage, at which point someone would need to go on an ACA insurance policy.
Those who do purchase short-term medical insurance are often advised to supplement it with a policy to help cover the deductible, or with a critical illness plan to provide additional coverage in the event of a catastrophic illness. Paired well, this can provide excellent coverage at a price which today’s families can afford.
An Example Short-Term Medical Offering
Like ACA insurance, the first things to consider in a short-term medical policy are the deductible, coinsurance, and out-of-pocket-max. Things like doctor’s visit and urgent care are always important, but are usually not among the most expensive medical costs. When an accident or illness requires hospitalization or extensive outpatient care, people will appreciate the benefits of a low out-of-pocket-max more than a low office visit fee.