The American health care system is a confusing mess for all who dare to take it on. For low income families in search of options, they’d have an easier time navigating Willy Wonka’s house in the dark.
The Affordable Care Act undoubtedly opened the doors to care for millions, many for the first time. Still many others remain in need of relief and affordable coverage. While there has been no appetite to improve the ACA or close the coverage gap, other insurance type products are now being held up as the answer.
Short term health plans, health care sharing ministries, and direct primary care agreements are becoming a bigger part of the health care landscape. All Floridians should be aware of their advantages and shortfalls.
Our blog series will discuss all three options, beginning with short term plans.
Short Term Plans and What You Need To Know
In February, the federal government proposed rules that would increase the length of coverage for short-term health insurance plans from three months to 364 days. These short-term plans, also known as junk plans, typically exclude coverage for critically important health care services; decide premium rates by gender, health status, and age; and put individuals and families at significant financial risk because they do not cover catastrophic events. (You can see an example of the benefits offered in STPs by clicking the image.)
Short-term plans are attractive to some because they offer lower premiums for healthy consumers than comprehensive plans that comply with the ACA. Lower premiums for the young and healthy are achieved by offering less overall coverage and denying coverage or charging higher prices to people with pre-existing conditions.
For a number of reasons, the wide use of these plans poses a unique threat to Floridians.
Florida has a rapidly growing number of seniors, but many of them are not yet eligible for Social Security or Medicare. Expanding the use of these plans will only hurt seniors’ efforts to find coverage.
First, because of age and health issues, seniors often can’t rely on anything less than comprehensive coverage. Additionally, junk plans distort insurance markets to the detriment of our seniors. They tend to attract younger, healthier consumers, leaving seniors who are ineligible for tax credits on the Marketplace to face higher premiums and out of pocket costs.
Finally, for those able to find initial benefit by enrolling in short term plans - it carries a dangerous gamble. Florida experiences extremely high rates of chronic disease and other health issues like substance use disorders. Many of these plans offer inadequate benefits to actually help these people in a meaningful way when they become ill.
According to the Center on Budget and Policy Priorities, "The three short-term insurers with the largest enrollment spent just half of the premiums they collected on enrollees’ medical claims in 2016, well below the 80 percent threshold that providers of comprehensive individual-market coverage must meet. Many people who enrolled in short-term plans discovered later that the insurers didn’t pay their claims when they got sick, leaving them with thousands of dollars in medical bills."
Navigating the healthcare system is hard enough. These plans might have their usefulness for some Americans, but it leaves many more to endure higher costs and incomplete coverage.