Buyers Of Short-Term Health Plans: Wise Or Shortsighted?

By Anna Gorman
Kaiser Health News

WWR Article Summary (tl;dr) Essentially, short-term plans cost less because they cover less. The question is, how much risk are you willing to take? New federal rules will allow consumers to find out.

Kaiser Health News

Supporters of the nation’s health law condemn them. A few states, including California and New York, have banned them. Other states limit them.

But to some insurance brokers and consumers, short-term insurance plans are an enticing, low-cost alternative for healthy people.

Now, with new federal rules allowing short-term plans that last up to three years, agents said, some consumers are opting for these more risky policies.

Adding to the appeal is the elimination of a federal tax penalty for those without comprehensive insurance, effective next year. Short-term health plans often exclude people with pre-existing conditions and do not cover services mandated by the Affordable Care Act.

Colorado resident Gene Ferry, 66, purchased a short-term health plan this month for his wife, Stephanie, who will become eligible for Medicare when she turns 65 in August.

The difference in the monthly premium price for her new, cheaper plan through LifeShield National Insurance Co. and the policy he had through the ACA is $650.

“That’s a no-brainer,” said Ferry, who considers the ACA “atrocious” and supports President Donald Trump’s efforts to lower costs. “I was paying $1,000 a month and I got tired of it.”

He signed up his wife for a three-month plan and said that if she is still healthy in January, he will purchase another one to last six months.

But Ferry, who is covered under Medicare, said if something happens to her before open enrollment ends, which in Colorado is in January, he would buy a policy through the exchange.

There’s a lot of “political jockeying” over the value of short-term plans, said Dan Walterman, owner of Premier Health Insurance of Iowa, which offers such policies. “I think people can make their own choices.”

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