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The Real Cost of Short-Term Health Insurance Plans


Last year, I began assisting a consumer, R.L. from Miami, in addressing insurance claims that were denied under his short-term health insurance plan. The cost of an ACA marketplace plan had gone up too much for the family, who did not qualify for tax credits, so they decided to take out a cheaper short-term plan.

In July 2018, one of his family members hurried to the emergency room with acute stomach pains. After a slew of tests, doctors diagnosed a urinary tract infection. The hospital then filed claims with the family’s short-term insurance plan. Months later, bills totaling close to $17,000 started coming in from the hospital and physicians who had seen the patient.

The invoices showed that the insurance company had denied the claims because of a pre-existing condition review and were waiting for the medical records. However, none of the providers had received a request from the insurer to provide medical records at that point. In the meantime, unpaid bill notices were still arriving at the consumer’s home.

Several calls were made to the insurance company to see if they had requested and reviewed the records. They hadn’t. They were waiting for a call back from the providers, who reiterated the insurer had never contacted them for the medical records. The family proceeded to get the medical records themselves and mailed them with a tracking number to the insurance company. Medical providers will provide the records free of charge to the insurance company, but not to the patient, so they had to pay the cost of getting their own medical records as well as the mailing cost.

By this time third notices and phone calls from collection agencies started. “I am about to give up. Seriously.” Unfortunately, R.L. is still battling these issues.

Short term insurance plans do not have to meet the Affordable Care Act’s consumer protections such as covering pre-existing conditions, prescription drugs, mental health to name a few. According to Families USA: "Short-term policies do not have to comply with federal rules about what they must cover, thus may not cover essential health benefits. Nor do these plans have to comply with rules about how clearly and simply they must explain their benefits to shoppers, people could easily be surprised to find out that a policy does not cover their needs." Despite being promoted by some lawmakers as a cheaper, better alternative – short-term plans are likely to increase medical debt hardship and bankruptcies.

Louisa McQueeney, Florida Voices for Health's (FVH) Program Director, served as a certified ACA Navigator for 4 years. She continues to help Florida's health care consumers navigate the health care system in her role at FVH.

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