When it comes to their healthcare needs, Americans are looking for lower-cost alternatives. There are other options for those who do not need a huge need for medical services. Even those with some monthly or quarterly medical needs can accept less coverage if they save enough on their premiums. The good news is that alternative plans are here, and their demand will continue to grow as 2018 continues.
The Trump administration signed an executive order in the fall of 2017 to extend short-term health care plans from the current 90-day limit to the previous 365 days. These types of policies are not intended to replace the ACA program, but to provide individuals and families with more options for meeting their health care needs.
That’s good news for the millions of Americans who don’t qualify for federal health subsidies and really can’t afford ACA plan premiums. By freeing up some hard-earned money, they can put it back into the economy, retirement, college, or whatever they need.
Short-term plans are non-ACA-qualified health plans that do not need to cover pre-existing conditions or certain ACA (Obamacare) Essential Health Benefits (EHB), which are covered by ACA-qualified plans.
These benefits include:
- Maternal and Newborn Care
- Mental Health and Substance Use Disorder Services
- Certain preventive health benefits, such as routine check-ups, mammograms, cancer screenings, etc.
- Pediatric Services (Oral Care and Vision)
A short-term plan is a good option, and the above-mentioned coverage is not included in the policy. Insurance should be for sudden, expensive things that you usually can’t afford on your own. Look at your homeowners and auto insurance. They provide protection against unforeseen and costly risks that you cannot afford yourself. Short-term medical plans do just that.
The short-term medical plan has been extended from the current maximum of 90 days to a maximum of 365 days, effective May 1. After that date, you can apply to insurance companies that offer short-term plans without a 90-day maximum.
Another downside in 2018 is personal empowerment. According to the IRS, short-term medical plans are not ACA-compliant plans and will be subject to tax penalties when you file your taxes in 2018. There are other ways to solve this problem. You need to look for professionals in the field for more information. For tax year 2019, this tax penalty will disappear.