Non-Obamacare short-term health plans on the rise

Americans are looking for cheaper alternatives when it comes to their healthcare needs. Those who don’t need a high demand for medical services to be covered have other options. Even those with some medical requirements on a monthly or quarterly basis are fine with a little less coverage if they save enough on premiums. The good news is that there are alternative plans, and demand will continue to grow as 2018 progresses.

The Trump administration signed an executive order in the fall of 2017 requiring short-term health care plans to be extended from the current 90-day limitation to the full 365 days it once was. These types of policies are not there to replace ACA plans, but to provide individuals and families with more choices for their health care needs.

This is great news for millions of Americans who are ineligible for federal health subsidies and really can’t afford the premiums for the ACA plans. By freeing up some of their hard-earned dollars, they can put it back into the economy, retirement, college, or whatever.

Short-term plans are non-ACA-qualified health plans that are not required to cover pre-existing conditions or certain ACA (Obamacare) mandatory Essential Health Benefits (EHB), which are covered by ACA-qualified plans.

These benefits include:

  • Maternity care and newborn care

  • Mental health and substance use services

  • Specific preventive care benefits such as routine exams, mammograms, cancer screenings, etc

  • Pediatric services (oral care and vision)

The short-term plans are a good option without the above coverages in the policy. Insurance is for sudden, expensive things that you wouldn’t normally be able to afford on your own. Look at your homeowners and car insurance. They provide cover for the unforeseen, costly risks that you cannot bear yourself. The short-term medical plans do just that.

The short-term extension of the medical plan from the current maximum of 90 days to the maximum of 365 days will take effect on May 1. After that date, you can apply to an insurance company that offers the short-term plan that doesn’t have the 90-day maximum limit.

Another drawback for 2018 is the individual mandate. The short-term medical plan is not an ACA-compliant plan, according to the IRS, and will be subject to the tax penalty when you file your taxes in 2018. There are other ways to get around this. You need to find a professional in the field to get more information. This tax penalty lapses for the 2019 tax year.