Just in time for halloween, we have an episode about some of the spookiest health insurance plans of all – “junk” health insurance plans, or “short-term” health insurance plans. The President must’ve heard that we’re talking about health insurance all month, because the administration just pushed through last-minute rule change that could mean that much, much cheaper health insurance plans are available.
Reasons you might want to get a short-term health insurance plan
- They’re cheap.
- You’re healthy.
Questions we answer in this episode
- Why should you care about short-term health insurance plans?
- If you can’t find affordable health insurance on the exchange or through work, should you get one of these plans instead?
- Will they be available everywhere?
- What’s different in 2019 about health insurance based on these policy changes?
- How do you make sure that you’re not getting a junk health insurance plan?
Downsides of Short-Term Health Insurance Plans (Also known as junk plans)
-There’s no regulations on the out-of-pocket maximum or co-insurance you could pay under this plan, so you could get in a car crash and have $80,000 in medical bills and it turns out you owe 20-30% of that bill- after your deductible. With an ACA-compliant plan you have a federal regulation that limits
– They do not have to cover essential health benefits – typical short-term policies do not cover maternity care, prescription drugs, mental health care, preventive care, and other essential benefits, and may limit coverage in other ways
-Many have a lifetime limit imposed, meaning the amount they will pay will top out at $1 million – $2 million – which sounds like a ton, until/unless you have a very expensive condition like a child born prematurely, or an expensive cancer treatment plan, or a serious traffic crash with an ICU stay.
– If you do get sick while on the plan, they can decline to renew you and just drop you from the plan altogether.
– Even if you don’t have a documented history of a pre-existing condition, starting treatment while on the plan, they can dig into your past and see if there were any indications that you may have had it before – and then refuse to pay for treatment or medication. This can really affect former athletes.
– Many people will get rejected from getting a junk plan at all due to a long, long list of deniable conditions (everything from being trans*, asthma to history of yeast infections or being prescribed certain medications, such as PREP).
-While they can no longer charge you more based on gender, they can do what’s called “community ratings” and charge you more based on your occupation, zip code, or other factors. For example, hairdressers have historically been charged more because of the higher percentage of gay men in the profession, which they deem as at higher risk of HIV (which is costly). That kind of community rating is now possible again with these plans.
Some Declinable Conditions in Medically Underwritten Plans
- Alcohol abuse/ Drug abuse with recent treatment
- Arthritis (rheumatoid), fibromyalgia, other inflammatory joint disease
- Cancer within some period of time (e.g. 10 years, often other than basal skin cancer)
- Cerebral palsy
- Congestive heart failure
- Coronary artery/heart disease, bypass surgery
- Crohn’s disease/ ulcerative colitis
- Diabetes mellitus
- Hepatitis (Hep C)
- Kidney disease, renal failure
- Mental disorders (severe, e.g. bipolar, eating disorder)
- Multiple sclerosis
- Muscular dystrophy
- Obesity, severe
- Organ transplant
- Parkinson’s disease
- Pending surgery or hospitalization
- Pneumocystic pneumonia
- Pregnancy or expectant parent
- Sleep apnea
SOURCE: Kaiser Family Foundation review of field underwriting guidelines from Aetna (GA, PA, and TX), Anthem BCBS (IN, KY, and OH), Assurant, CIGNA, Coventry, Dean Health, Golden Rule, Health Care Services Corporation (BCBS in IL, TX) HealthNet, Humana, United HealthCare, Wisconsin Physician Service. Conditions in this table appeared on declinable conditions list in half or more of guides reviewed.
Thanks to Kaiser!
For this episode, I really want to thank the amazing resources and studies put out by the Kaiser Family Foundation – they produce incredibly high-quality academic write-ups of health care policy, and their research was invaluable in preparing this show because I don’t know most of this off the top of my head as the policy is so dense. So thanks a lot.
Other episodes during health care month
- Save money on dental – with or without insurance
- How to choose a health insurance plan during open enrollment
- Your Trump Health Insurance Questions Answered (from last year but still relevant)
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