Non-Obamacare Short Term Health Plans On The Rise

Americans are looking for cheaper alternatives when it comes to their health care. Those who do not have a great need for medical services to cover themselves have other options. Even those with some medical needs on a monthly or quarterly basis are okay with a little less coverage if they save enough premiums. The good news is that alternative plans are out there and demand will continue to grow throughout 2018.

The Trump administration signed an executive order in the fall of 2017 mandating that short-term healthcare plans must be extended from the current 90-day limit to the full 365 days as before. These types of guidelines are not intended to replace ACA plans, but rather to provide individuals and families with more choices for their health care needs.

This is great news for millions of Americans who do not qualify for federal health care subsidies and who truly cannot afford the ACA plan premiums. By freeing up some of their hard-earned dollars, they can put them back into business, retirement, college, or whatever else you need.

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

These benefits include:

  • Maternity and Newborn Care

  • Mental health and substance use disorders services

  • Specific preventive services such as routine check-ups, mammograms, cancer screening, etc

  • Pediatric Services (Oral Care and Vision)

The short term plans are a great option without the above coverages in the policy. Insurance is meant to be for sudden, expensive things that you normally couldn’t afford. Take a look at your homeowners and car insurance. They cover unforeseen, costly risks that you cannot afford to take yourself. The short-term medical plans do just that.

The short-term extension of the health insurance plan from the current maximum of 90 days to a maximum of 365 days takes effect on May 1st. After this date, you can apply to an insurance company that offers the short-term plan without the 90-day limit.

Another downer for 2018 is the single mandate. The short-term medical plan is not an ACA-compliant plan, according to the IRS, and is subject to the tax penalty if you file your taxes in 2018. There are other ways to get around this. You need to see a professional in the field for more information. This tax penalty does not apply to the 2019 tax year.

Thanks to Butch Zemar

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