COLUMBUS — New rules from the federal government are increasing the availability of temporary health insurance products known as short-term health plans.
“Short-term health plans can be an appropriate choice for some consumers,” said Ohio Department of Insurance Director Jillian Froment. “However, there is a difference in the level of coverage consumers can find with a product that meets all the requirements of the ACA versus these plans.”
Different options
Major medical health insurance plans (employer plans, Medicare, Medicaid or plans purchased on healthcare.gov) offer broad coverage, cannot exclude pre-existing conditions, and will cover many consumer needs, though specific benefits and cost-sharing will vary by plan.
Additionally, major medical insurance plans offer protections by prohibiting insurers from using health status when determining premiums. However, while major medical plans offer more comprehensive coverage, they can also be expensive and include high deductibles and out-of-pocket costs.
Short-term, limited duration plans are different. These plans provide coverage for less than 12 months, and are not required to provide the same level of benefits that major medical plans provide.
In addition, short-term, limited duration plans can generally refuse to issue coverage or charge higher premiums based on health status. These types of plans also have more exclusions on what the plan will cover and are not required to cover pre-existing conditions, though some may.
Coverage limits
For instance, short-term, limited duration plans may not include, or may place limits on, things like coverage for dependent children, biologically based mental illnesses, pre-existing conditions, and maternity prescription drugs.
Short-term plans may also include a fixed “per day” payment rate for things like a hospital stay. It is important for consumers to have a general sense of how much a hospital stay costs in order to understand how much the plan will or will not cover in the event of a hospital stay.
The gap between what a short-term plan pays and what the hospital charges may be significant.
Other limitations may apply, so it is important to review policies with a licensed insurance agent to find a plan.
There are several key facts to know if considering a short-term plan, including: These plans are not required to cover essential health benefits (like maternity, prescription drug, mental health, or comprehensive hospital benefits) and do not meet minimum coverage requirements.
Though the penalty for not having qualifying health insurance will be removed starting January 2019, it is important for consumers to understand they may incur penalties for the remainder of 2018 if they do not maintain qualifying coverage.
Consumers should ask about the plan’s limitations, cost-sharing, maximum amounts the plan will pay as well as exclusions to fully understand the plan being considered.
Ohio insurance regulations require plans to provide information to consumers about any limitations or restrictions related to networks and access to providers, if applicable.
Consumers can appeal any claim denials, or other adverse decisions, initially to the insurance company and then to the department, if necessary.
Consumers can purchase these plans directly from the insurer or through a licensed insurance agent. Consumers can find a list of licensed insurance agents on our website at www.insurance.ohio.gov.
