Short-term health insurance plans: Should truck drivers consider them?

 Short-term insurance plans can be a life saver during gaps in coverage, but with new rules allowing them to extend up to 3 years, it's important to understand what they cover and what they do not. ( Photo: Shutterstock )

Short-term insurance plans can be a life saver during gaps in coverage, but with new rules allowing them to extend up to 3 years, it's important to understand what they cover and what they do not. (Photo: Shutterstock)

It’s likely that in the next few months, many Americans – and truck drivers are no exception – will begin seeing advertising promoting “short-term” health insurance plans. These plans, which have been around for a while as a way to provide stop-gap coverage for people who lost insurance due to a change in job status or other reasons, are getting a reboot, if you will, under the Trump administration.

Formally approved last month, the administration sees these plans as a way to offer cheaper health insurance to Americans than what is available through Affordable Care Act (Obamacare) plans. Originally available only for 90 days, under the new rules, these short-term plans can now provide coverage for 364 days with insurers given the option to extend that coverage for up to 36 months total.

Now that the Obamacare individual mandate tax penalty has been removed, there is less incentive for anyone to buy a health care plan, so the government is opening up these short-term plans as an alternative. So, what are they, and should truck drivers consider a short-term plan? As with everything, that depends on your individual circumstances.

Matt Eyles, president and CEO of America’s Health Insurance Plans (AHIP), is concerned that the plans will open up individuals to higher costs. “Every American should be able to get affordable, comprehensive coverage, regardless of their income, health status, or any pre-existing conditions,” he said in a statement. “Consumers deserve more choices, particularly those who do not qualify for federal subsidies and must pay the full premium. We remain concerned that consumers who rely on short-term plans for an extended time period will face high medical bills when they need care that isn’t covered or exceed their coverage limits.”

Eyles went on to urge individuals to understand what is and is not covered by a short-term plan.

“Consumers should clearly understand what their plan does and does not cover. The new requirement for short-term plans to make clearer disclosures to consumers is an important improvement,” he said. “We also appreciate that the rule affirms the role of states to regulate these plans, including the option to reduce the duration period for short-term coverage.”

The short-term plans are different from association health care plans, which were approved earlier this year. Association plans, although not available yet, will group together individuals in similar businesses. Short-term plans can be purchased by anyone.

So, what exactly is a short-term health plan? Here are answers to some common questions:

What is a short-term health insurance plan?

Short-term health plans are designed to provide minimum health coverage during a gap in coverage. Under the Trump administration’s new rules, insurers can offer the plans for up to 3 years, up from 90 days under current law. According to UnitedHealthcare, the plans offer flexibility with the ability to specify the length of the plan, choose from various deductibles, and drop coverage without penalty.

How do they differ from Affordable Care Act (Obamacare) plans?

Besides offering much cheaper premiums (some as low as $25 per month), short-term plans are not required to cover pre-existing conditions, as ACA plans must. Depending on the plan, they also may not cover things such as maternity, mental health, prescription drugs or substance abuse treatment, or any of the 10 essential health benefits required by the ACA. These include doctor visits for illness, emergency services, hospitalization, rehab and laboratory tests and services. Short-term plans also usually include annual or lifetime dollar limits, which are not allowed on Obamacare plans.

What do they cover?

Short-term plans may cover, depending on the plan you choose, doctor visits subject to a deductible or copay, emergency services, hospitalization and most lab tests. Deductibles may be larger than Obamacare deductibles and even when coverage is available, such as a hospital stay, it may be minimal, leaving most of the bill to the individual. Prescription drugs are also a big variable, with some plans offering basic coverage and others offering none or extremely high co-pays. Again, you need to check the plan as not all short-term plans are the same.

Are there additional limitations?

Beyond the coverage differences, short-term insurance plans require completion of a medical questionnaire. Under Obamacare plans, an insurer can’t deny you coverage so there is no questionnaire, but short-term plans are different. Once the questionnaire is complete, the insurer will review and determine if it wants to offer you coverage. Failing to disclose medical conditions can result in termination of the policy. Also, the new law that extends the plans up to 36 months must be adopted by individual states, so the plans may be available in some states but not others. There is also no requirement for an insurer to extend coverage, meaning the insured can cancel your coverage after the initial coverage period expires.

If I get sick, can I switch to a more comprehensive plan?

In short, the answer is yes, but you may have to wait. According to Myra Simon of AHIP, Obamacare open enrollment is Nov. 1-Dec. 15, so if you don’t enroll during this time, you have to wait until the next open enrollment period unless you have a qualifying life event, such as a job change or marriage. That means if you have a short-term plan and you get sick in March and require additional coverage, you will have to wait until open Obamacare enrollment begins in November. During that time, you will be required to pay whatever is not covered by your short-term insurance. The good news is that when you enroll in an Obamacare plan, the insurer can’t deny you coverage because of a pre-existing condition.

When are they available?

Short-term plans are not available yet, as the final rule on them was just published. By law, the plan can’t go into effect until 90 days after publication, so early October looks like the current timeframe for availability.

How do I get one?

Most insurers offer short-term plans, so contact your insurance company to find plan options.