Entrepreneur Tim Winard found himself in a tough spot when he left his corporate position in manufacturing to venture into his own business. For the first time, he was faced with the task of procuring health coverage independently, as he sought a suitable plan for himself and his wife, who was also in a career transition phase. The transition from a company-provided insurance plan to personally procuring a health insurance plan had him teeming with anxiety. After reviewing the Affordable Care Act plan through an insurance associate, he refrained from opting for it, citing cost concerns and opted for a six month short-term insurance policy instead.
Half a year later, Winard was still knee-deep in establishing his enterprise, hence he opted for another short-term insurance plan from a different provider, this time with a monthly premium of $500. During this coverage period, he found himself needing a colonoscopy. After getting in touch with his insurer, he was advised to opt for any facility of his choice for the procedure. He ended up choosing a hospital located in Elmhurst, Illinois, a stone’s throw away from his residence in Addison.
Here comes the kicker: the health insurance policy he had opted for was a short-term one, which is not obligated to conform to the rules stipulated by the ACA as these policies are meant to be temporary. Just like a chameleon, benefits within these short-term plans can change color, with some having specific dollar caps for varied types of healthcare procedures – often less than the actual cost. What is covered is akin to navigating a maze, and the final say on interpreting the rules lies with the insurer.
Even though some of these temporary policies seem similar to comprehensive health insurance, they all come saddled with serious restrictions. Most come with limits that can baffle those accustomed to workplace health plans or comprehensive ACA plans. For instance, they verify applicants for underlying health conditions—which could lead to rejection, omission of those health hurdles, or even exclusion of drug coverage and maternity care.
These short-term plans are typically less expensive than an unsubsidized ACA plan due to their limited coverage. As Cynthia Cox, Vice President and Director of the program on the ACA at a health information non-profit named KFF, puts it, ‘The general trade-off is lower premiums versus what the plans actually cover.’ However, the catch here is that these short-term plans can turn people with pre-existing ailments away, while also not having to cover essential requirements of healthcare.
Imagine Winard’s surprise when he received a bill of more than $7,000 for his colonoscopy. After getting in touch with his insurance provider, he discovered a fine print – the term ‘outpatient facility’ covered his procedure. His insurance plan indicated coverage of colon cancer screenings at 80% after the deductible is met, and also an 80% coverage for the cost of medications prescribed in an outpatient setting.
Winard, who had met his deductible, assumed he would have to pay only 20% towards his colonoscopy. He was left perplexed when his screening, despite being performed at a hospital, was designated by his insurance company as a procedure at an ‘outpatient’ facility. A spokesperson by the name Allie Burke from Elmhurst Health clarified that their hospital has a separate building for day-same outpatient procedures like colonoscopies.
Winard’s story underlines the need to scrutinize short-term plan terms and conditions because the attractive lower premiums may come with several caveats. These plans often don’t offer comprehensive benefits and it’s crucial to verify which services are in the fold and which ones get kicked to the curb. Checking if there are daily or per-policy-period dollar caps on coverage or other payout limits could save potential future exasperation.
The federal government provides subsidies based on household income for ACA plans. This scheme can align the costing of ACA plans with cheaper short-term plans, however, the ACA comes with a wider umbrella of benefits. The comparison is much like comparing apples with oranges.
Looking back, Winard confesses he could not differentiate between ACA policies and short-term plans. His word of advice? Dig over marketing materials with a fine-tooth comb, and always get prior cost estimates, preferably in writing, for non-emergency services like a colonoscopy.
The post How Biden’s ACA Lures Americans into Unsafe Short-Term Insurance Plans appeared first on Real News Now.
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