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Short Term Health Insurance Plans: What You Need to Know

Friday, November 16, 2018

TargetHIV

From the ACE TA Center

What is short-term health insurance, and what does it mean for Ryan White HIV/AIDS Program (RWHAP) clients?

The 2019 Marketplace Open Enrollment Period is in full swing, and enrollment assisters across the country are successfully enrolling clients into quality, comprehensive health insurance plans that meet their health and financial needs! These include private plans offered both on and off the Marketplace, as well as Medicaid and Medicare coverage.

Short term, limited duration (STLD) plans are increasingly being sold by insurers. These plans, also referred to as ‘skinny plans,’ do not provide ACA-required essential health benefits or protections against pre-existing conditions, and are inadequate for individuals with complex or chronic health conditions like HIV.

Below, the ACE TA Center explains (1) what STLD plans are, (2) the kinds of benefits that are often missing from these plans, (3) where the plans are sold, and (4) potential enrollment restrictions for people living with HIV (PLWH).

1. What are STLD plans?

  • As hinted by their name, STLD plans provide coverage for less than 365 days, sometimes only 3 to 6 months at a time (but up to 364 days).
  • These plans generally have lower premiums than ACA-compliant plans offered on and off the Marketplace, but do not provide the same benefits or protections against pre-existing conditions (see below).
  • Some STLD plans take into consideration a person’s health status, including pre-existing conditions, during the application process. Applicants may be asked whether they have been diagnosed with HIV, and in many cases, the insurer will refuse to sell a short term plan if they answer ‘yes’ to that question.

2. What is “skinny” about STLD plans (what benefits are often missing)?

  • STLD plans are not required to cover the essential health benefits that all ACA-compliant plans must provide. Indeed, most STLDs do not cover mental health services, substance use treatment, or maternity care. In some cases, specific conditions such as HIV or cancer may be excluded from coverage.
  • Even if you are enrolled into an STLD, there is no guarantee that claims will be paid. In some cases, you may still be on the hook for the entire bill.
  • Limitations and restrictions may also apply. For example, short-term policies may place a limit on the number of covered doctors’ visits or cap the dollar amount of benefits for certain services.
  • These plans can also restrict or not include prescription drug coverage, which can pose significant challenges for PLWH.

3. Where are they sold?

STLD plans are only available through insurance brokers or directly from insurance companies. They are not sold on ACA health insurance exchanges. These plans are often sold by companies who also sell non-health related insurance, such as life or home insurance. In some cases, well-known health insurance companies may also sell these types of plans. STLD plans are not available for sale everywhere. California, Massachusetts, New Jersey, and New York ban the sale of these plans.

4. How do I know if a plan is a STLD plan or an ACA-compliant plan (enrollment restrictions for PLWH)?

Short term policies will not always be labeled as such. While it might be difficult to immediately determine whether a plan you are reviewing is a STLD plan, the following can help you identify STLDs:

  • Health status questions: ACA-compliant plans will not ask questions about a person’s health status, such as treatments and diagnoses received in the past.
  • Price: STLD plans will likely be much cheaper than ACA-compliant plans. Remember: the cheapest plans are not always the best plans!
  • Restrictions or coverage limits: STLD plans will often limit the amount of benefits provided and/or restrict certain medical conditions from coverage.
  • Different enrollment periods: STLD plans can have year-round enrollment periods, while ACA enrollment only lasts a handful of weeks each year.

A Reminder: STLD plans are not sold on any ACA exchanges. If you’re shopping on HealthCare.gov or a state-based marketplace website, you can be certain you are not reviewing STLD plans!

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