FORT LAUDERDALE, FLORIDA (AP) — United States (US) consumers who bought short-term health insurance thinking they had found a better deal than “Obamacare” during the open enrollment season may be in for a shock when they show up at their doctor’s office this year.
The low-cost plans aren’t required to cover basics such as prescription drugs or maternity care.
The Trump administration rolled back restrictions on short-term plans in 2018. But critics quickly labelled them junk insurance, warning they come with gaps and don’t have to cover pre-existing medical conditions.
Trump said the plans will offer “great health care at a much lower price,” at a White House event in 2018 when the changes were announced, describing them as “somewhat different, result the same”.
With premiums about a third of the cost of comprehensive coverage, short term plans are significantly cheaper but don’t meet requirements under the Affordable Care Act.
And while they cover major catastrophes such as a car accident, they don’t have to cover the law’s “essential” benefits — including mental health and substance abuse treatment and they won’t cover pre-existing conditions.
The latest enrollment season, which ended last month, saw a big promotional push for short-term plans. It marked the second year the plans were sold under loosened restrictions, and some insurance agents said they fielded calls from confused consumers fooled by low monthly premiums but who missed the fine print about limited benefits. Coverage on most plans was taking effect in January.
Insurance experts also complained about aggressive and misleading marketing tactics by some third-party sellers targetting Hispanics and low-income consumers. Nonetheless, short-term plans represent a fraction of the overall market.
Short-term plans have been around for years. Designed to help those switching jobs or retiring before Medicare eligibility, they were never intended to offer long-term comprehensive care. The plans have typically covered up to 90 days, but now can be renewed for up to 36 months.
A 2018 study by the Urban Institute revealed consumers seeking full coverage by searching online for ‘Obamacare plans’ or ‘cheap health insurance’ often ended up at sites selling short-term plans — more than 50 per cent of the time. It found websites often had limited information about what plans actually covered.
Insurance brokers note consumers typically choose a plan based on low monthly premiums, making it difficult to convince the cost-conscious that paying more secures more coverage.
Jodi Ray runs one of Florida’s largest programmes that helps consumers sign up for health insurance through the college of public health for the University of South Florida.
She said most can find an affordable plan that covers wellness visits, prescriptions and other comprehensive coverage.
Of the short-term plans, Ray cautioned, “We steer clear of those.”