With the uncertainty of the Affordable Care Act, Short-Term plans have seen a resurgence in the marketplace.
What is Short-Term Medical (STM) Insurance?
STM insurance provides coverage for periods from 30 to 360 days. It’s generally used as a stop-gap measure to prevent being totally uninsured while you’re between major medical policies. You might use it while between jobs, while waiting for open enrollment on your state’s health insurance exchange, after you’ve enrolled in a major medical plan but you’re waiting for that plan to take effect or to bridge a few months between retirement and Medicare. With STM policies you’re covered only for the stated time frame, and then the coverage ends.
Short-term policies are not ACA compliant plans.
So, unlike an ACA plan, a STM plan isn’t bound by an open enrollment period. However, STM policies will be subject to underwriting. Not only does this mean you might be refused a policy if you’re a bad risk, it also means the policy you’re offered may exclude coverage for pre-existing conditions. It also means the plan is not required to cover all of the ACA’s essential health benefits like preventive, mental health or maternity care. This also means that STM plans do not satisfy the ACA’s mandate for individual shared responsibility.
Because STM plans have more restrictive benefits and insurers can limit their risks with good underwriting, these policies can be less expensive than an unsubsidized major medical plan. These plans can usually be tailored to fit your needs and budget by choosing from different deductibles, coinsurance levels and even adding riders for accident or critical illness.
For help determining if a Short-Term Medical plan is right for you, give one of our agents at Ohio Health Benefits a call.