Short-Term, Limited-Duration Insurance Final Rule
6 ways the short-term medical change could impact you
Below, we’ve highlighted 6 things to know about the short-term medical (STM) news, including how these changes could result in lower premium payments for you.
1. You’ll have an affordable Obamacare alternative
While STM plans are not considered minimum essential coverage, they do provide another health benefits option for those who are exempt from the individual mandate or choose to pay the tax penalty.
Short-term health insurance can be a lower-cost option than major medical because they include limited benefits and do not fulfill ACA requirements. Short-term policies include benefits help pay for unexpected medical care resulting from accidents and illnesses. Because they usually exclude preexisting conditions, they tend to be an option for healthy individuals who want some financial protection from high claims.
- Can be quickly obtained year-round
- Cover a range of healthcare services, including emergency room treatment, hospital room and board, doctor office visits and more
- Come in many plan designs to fit your budget and healthcare needs
- May or may not require you to use network providershttps://www.uhone.com/shop/#/census?brokerid=AA2446994
- Are accepted by most healthcare providers
2. You may be able to get an STM plan that lasts up to a year
Prior to 2016, short-term health plans were available for as long as 364 days (depending on state laws). The final rule lifts the current 90-day limit in some states and, as explained by HHS, reverts “to the previous definition of short-term, limited-duration insurance which permits coverage for nearly a full 12 months."
3. You may be able to reduce your health insurance premium
As mentioned above, short-term plan premiums may be lower than major medical (i.e., Obamacare plan) premiums because they have limited coverage. As CMS pointed out in a press release announcing the final rule.
The average monthly premium for an individual in the fourth quarter of 2016 for a short-term, limited-duration policy was approximately $124, compared with $393 for an unsubsidized individual market plan.
The Departments of Labor and Health and Human Services (HHS) issued the proposed rule in February 2018, citing a lack of consumer options and the rising cost of insurance as the reason for lifting STM policy limitations.
“Americans need more choices in health insurance so they can find coverage that meets their needs,” said Health and Human Services Secretary Alex Azar. “The status quo is failing too many Americans who face skyrocketing costs and fewer and fewer choices. The Trump Administration is taking action so individuals and families have access to quality, affordable healthcare that works for them.”
4. You could still owe an Obamacare penalty (for now)
The ACA’s individual mandate requiring most people to have health insurance remains in effect. If you are not exempt and have short-term medical instead of minimum essential coverage, you could still owe a tax penalty. In 2019, the tax penalty will be repealed.
5. You can’t buy extended short-term health insurance yet
The rule may be final, but it becomes effective and applicable within 60 days of publication. That means longer plans may become available in October, just ahead of 2019 open enrollment for major medical insurance. This Final Ruling will affect Short Term Plans with effective dates of 2 October or later.
6. Short-term plans are available today (and may be effective as soon as 2 October with the new ruling.)
You don’t have to wait to buy short-term health insurance. You can enroll in just a few minutes, right now. The application is subject to acceptance by the carrier.
Next-day coverage is available, and the policies that are currently available last from 30 days to 3 months. You may be able to apply for a new policy after 3 months, depending on state laws where you live. If you choose a 2 October 2018 effective date, the new ruling will apply and if accepted, you can lock in a time frame and rate for up to 360 days in Tennessee.
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