Short Term Medical Policies on the rise

April 11, 2016

Our nation just completed the third Open Enrollment under the ACA law for people buying individual health plans. While the first year saw many individuals rushing to sign up for insurance that would not ask any medical questions and therefore not exclude Pre-Existing conditions in any way, there has not been any significant growth in the number signing up for coverage since 2014; this year's number around 13 million and 2014 numbers were around 12.8 million.

One of the reasons could be the rising premiums. Across the country there have been double-digit increases, and in some states increases have exceed 50%. In Illinois, some individuals are now paying more than double the premiums of a pre-ACA plan just a few years ago. Many individuals have decided to go without insurance and pay the penalty; some of those who needed care were actually able to get a policy outside of open enrollment simply by saying they had a Qualifying Event; many carriers, including the Marketplace, were not asking for proof of the Qualifying Event. But this is no longer true... and insurance carriers are no longer willing to take your word that you have a Qualifying Event outside of the 3 month annual Open Enrollment period; (from Nov 1st - Jan 31sst for the next 2 years; for the 2019 year, O.E. will end on Dec 15th.) Now individuals must provide proof of a Qualifying Event such as a Loss of Employer Group Coverage (whether through termination, decreased hours, divorce, or death), Marriage, Birth, or move to a new area where your plan would no longer work. This means that individuals can't just wait for something to happen to them and then sign up for coverage.

An alternative to going without coverage is to enroll in a Short Term Medical plan. A Short Term Medical (STM) plan is a major medical policy that you can buy for up to 6 months, but some companies sell plans for up to 12 months. These plans have been around for decades and were typically purchased when people were waiting for their new employer coverage to kick in or their college student graduated and was no longer on the parent's plan. Most plans offer at least a million dollars of coverage with a variety of deductibles and an 80/20 coinsurance with a maximum out of pocket for covered expenses. And you can get all of this for a FRACTION Of the cost. (Read more:

So what's the downside? Well for starters, it is NOT ACA compliant, which means you will still pay a Tax Penalty. Because STM plans do not meet the law's requirements, they do not have to cover any pre-existing conditions, most don't cover maternity or mental health benefits, and all of them ask medical questions, including some big things like history of Cancer, Diabetes, and Heart disease. If you say yes to any questions, you will probably get declined for coverage. The carriers can also decline for height and weight. So if you are deemed 'healthy' and not worried about covering any ongoing medical conditions, STM insurance will give you coverage for future medical needs should something major happen to you. I have often referred to it as "Get Hit By A Bus Insurance".

For those individuals who did not sign up during open enrollment, it might be a good option to give you some coverage and a little peace of mind.

For a free quote and to get more info, click here: