Nothing stays the same in healthcare these days – and things are changing yet again. Right now, the Trump administration is preparing a short-term health insurance proposal that would revert existing short-term insurance rules back to pre-Affordable Care Act (ACA) rules. This means that each state would have the option to either follow the suggested Federal guidelines, or change them to suit their particular state’s needs.

You see, originally, short-term health insurance was intended to be in place for up to, but not beyond, 364 days. The reasons someone chose short-term health insurance typically stemmed from a loss of employment or a student who was between semesters. However, since the enactment of the ACA people have been seeking short-term health insurance much more often, and not just because they missed open enrollment (this year the ACA only offered a six week window to get covered or face possible tax penalty).

Instead, the reasons people are choosing short-term health insurance since the enactment of the ACA have lead to an almost doubling of insurance premiums since the year 2011.

The primary reasons for the dramatic increase in premiums stem from the following:

1. People are choosing to pay the penalty instead of paying for health insurance through the ACA because the insurance is expensive, the deductibles and premiums are high, and people would rather save money and take their chances with no health insurance.
2. Others are choosing to pay the penalty to opt out of health coverage through the ACA and choosing instead to acquire short-term health insurance. The cost for the penalty and short-term health insurance combined is typically less than half the cost of obtaining coverage through the ACA. Those who choose this route reason that some coverage is better than no coverage, and they can save a lot on their overall cost of health care.
3. Finally, many people are opting to get Gap Insurance, which is offered by Healthmarkets of Richland Hills Texas. They offer benefits if you are catastrophically ill or have a catastrophic accident and pay the benefit directly to their policyholders in the event it is needed. This helps to pay the large deductible often associated with short-term health insurance and ACA plans.

Because of these primary reasons, some major medical players argued that new restrictions should be placed on short-term health insurance to keep issuers from luring in young, healthy adults away from the ACA plans and into cheap, poor coverage. The Obama administration agreed, and in November 2016, they reduced short-term health insurance coverage timelines from 364 days to three months or less to help discourage people from using these short-term plans as an alternative to full medical coverage.

What President Trump and his administration are pushing for now is to lift the three-month restriction and return short-term health insurance policies up to 364 days, and then leaving it up to the states to decide what timelines they want in their states.

For more information on this new proposal and how it will affect you, please contact me. I would be happy to answer your questions and put together a plan that is right for you.

Footnote: Mr. Steven Gilbert is a licensed health insurance agent licensed in Colorado, Washington, Alaska, Utah, Texas, Florida, and New Mexico.