Should I buy short-term health insurance or ACA plan

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Hayden
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Should I buy short-term health insurance or ACA plan

Post by Hayden »

I am in the process of moving to the Phoenix area and i need to buy individual health insurance here. Just spoke with an insurance agent who recommended a short term medical plan, rather than an ACA plan. His reasons are:

1) only about 50% of doctors here take the ACA plans, whereas about 95% of doctors here take the short term medical plans.
2) the ACA plans only provide coverage in this county, whereas the short term plans provide coverage nation-wide.
3) short-term plans are much cheaper

So, what are the downsides to signing up for a short term medical plan, rather than an ACA plan? Why would one pick an ACA plan over a short-term plan?
Last edited by Hayden on Wed Feb 26, 2020 9:46 am, edited 1 time in total.
naj89
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Re: Short-Term Health Insurance Plan

Post by naj89 »

My family recently had short-term medical coverage offered via UnitedHealthcare, underwritten by Golden Rule Insurance Company. I had a good experience through them, and their website has a comparison chart of common coverage and issuance differences between an ACA plan and a short-term plan here: https://www.uhone.com/insurance/short-term

I have a young son so one of the key components for us was ensuring his scheduled "well visits" were covered as preventative care under the short term plan. Be sure to mention any planned or upcoming visits with your insurance agent. They should do their due diligence for you by verifying coverage of your planned visits with the short term plan.

While there was the rollback of the federal tax penalty for not having minimum essential coverage, you will want to validate that there aren't any state specific penalties, as short term plans often do not fit the definition of minimum essential coverage. You will also want to be sure if you plan to enroll in an HDHP plan, any HSA contributions are not in excess with the 12-month rule. For our particular circumstance, we were not covered under a HDHP on 12/1, and therefore had to be more mindful of this. Because of the timing of this post, you may not be impacted like we were but worth mentioning.
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Hayden
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Re: Should I buy short-term health insurance or ACA plan

Post by Hayden »

Bumping this once. It's been a distracting couple of days so maybe folks didn't see this.
adamthesmythe
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Re: Should I buy short-term health insurance or ACA plan

Post by adamthesmythe »

What I read is that short-term plans have limits on pre-existing conditions, possibly a policy maximum, and are not guaranteed renewable. I have read that some buying these plans consider a switch to ACA as a backup in the event of unexpected serious medical issues.

Short term plans may be a good bet for those young(ish), in good health, and without many assets.
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Watty
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Re: Should I buy short-term health insurance or ACA plan

Post by Watty »

Hayden wrote: Mon Feb 24, 2020 6:48 pm Just spoke with an insurance agent who recommended a short term medical plan, rather than an ACA plan.
One thing to watch out for is that the insurance agent likely gets paid a nice commission if you buy a short term plan.

If you buy an ACA plan they may get little or no commission.

You cannot trust them to give you unbiased information, you need to do your own research.
Hayden wrote: Mon Feb 24, 2020 6:48 pm So, what are the downsides to signing up for a short term medical plan, rather than an ACA plan? Why would one pick an ACA plan over a short-term plan?
A big problem is that there is no standard for what "short term insurance" actually covers and they can be a lot of different things. You need to read through the details of the plans carefully. Some of them do not cover things like preexisting conditions or cancer drugs (or any prescriptions) which is why they are less expensive.

You might think that you don't have preexisting conditions but insurance companies were notorious for using this in the past for getting out of paying for treatment. Literally something like having had a cold can be used to not cover you for lung cancer. They will also be quick to say there is a preexisting condition with little justifiable cause and make you fight to get coverage.
Hayden wrote: Mon Feb 24, 2020 6:48 pm 1) only about 50% of doctors here take the ACA plans, whereas about 95% of doctors here take the short term medical plans.
I really question those figures, at best they are likely comparing apple to oranges.

What that might mean is that 50% of the doctors will be in network with an ACA plan and only charge you the price they agreed to pay the insurance company.

The 95% might be willing to bill as an out of network provider and take what the insurance company will pay but then bill you for the difference. This can be a ridiculous amount and it is common to see things like a $1,000 charge being reduced to the $100 that the insurance company would pay for an in network doctor. For an out of network doctor you would be responsible for the other $900.

This is more the normal way it works than an exception, if you have some explanation of benefits for recent medical visits look at the billed amounts on them and then see what the insurance company reduced the charge to.

If you are in something like a serious car accident this could leave you with huge medical bills.

Hayden wrote: Mon Feb 24, 2020 6:48 pm 2) the ACA plans only provide coverage in this county, whereas the short term plans provide coverage nation-wide.
You need to dig through the details to see what is covered.

At least with any of the plans I have looked at and ACA plan would provide care anywhere in the country for emergency or urgent care like when you are traveling.
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Hayden
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Re: Should I buy short-term health insurance or ACA plan

Post by Hayden »

Watty wrote: Wed Feb 26, 2020 11:32 am
Hayden wrote: Mon Feb 24, 2020 6:48 pm Just spoke with an insurance agent who recommended a short term medical plan, rather than an ACA plan.
One thing to watch out for is that the insurance agent likely gets paid a nice commission if you buy a short term plan.

If you buy an ACA plan they may get little or no commission.

You cannot trust them to give you unbiased information, you need to do your own research.
Hayden wrote: Mon Feb 24, 2020 6:48 pm So, what are the downsides to signing up for a short term medical plan, rather than an ACA plan? Why would one pick an ACA plan over a short-term plan?
A big problem is that there is no standard for what "short term insurance" actually covers and they can be a lot of different things. You need to read through the details of the plans carefully. Some of them do not cover things like preexisting conditions or cancer drugs (or any prescriptions) which is why they are less expensive.

You might think that you don't have preexisting conditions but insurance companies were notorious for using this in the past for getting out of paying for treatment. Literally something like having had a cold can be used to not cover you for lung cancer. They will also be quick to say there is a preexisting condition with little justifiable cause and make you fight to get coverage.
Hayden wrote: Mon Feb 24, 2020 6:48 pm 1) only about 50% of doctors here take the ACA plans, whereas about 95% of doctors here take the short term medical plans.
I really question those figures, at best they are likely comparing apple to oranges.

What that might mean is that 50% of the doctors will be in network with an ACA plan and only charge you the price they agreed to pay the insurance company.

The 95% might be willing to bill as an out of network provider and take what the insurance company will pay but then bill you for the difference. This can be a ridiculous amount and it is common to see things like a $1,000 charge being reduced to the $100 that the insurance company would pay for an in network doctor. For an out of network doctor you would be responsible for the other $900.

This is more the normal way it works than an exception, if you have some explanation of benefits for recent medical visits look at the billed amounts on them and then see what the insurance company reduced the charge to.

If you are in something like a serious car accident this could leave you with huge medical bills.

Hayden wrote: Mon Feb 24, 2020 6:48 pm 2) the ACA plans only provide coverage in this county, whereas the short term plans provide coverage nation-wide.
You need to dig through the details to see what is covered.

At least with any of the plans I have looked at and ACA plan would provide care anywhere in the country for emergency or urgent care like when you are traveling.
Thanks for the detailed response. I do have assets, and i can afford the full-price ACA plan. I don't think i have a pre-existing condition, but as you point out, perhaps an overly aggressive insurance company would think differently.

Seems like i should just go ahead and purchase the ACA plan.
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HueyLD
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Re: Should I buy short-term health insurance or ACA plan

Post by HueyLD »

I had a first hand experience with an insurance company trying to manufacture a pre-existing condition that did not exist. That was before the ACA.

I had to fight the insurance company, including having a physician statement indicating that the condition did not pre-exist. I eventually told the insurance company that I would file a complaint with its state insurance regulator. I guess the insurance company didn’t want its books raided by the regulator and caved.

The moral of the story is: do not trust any policy with pre-existing clause because it could be very dangerous to your health and wealth.
snowman
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Re: Should I buy short-term health insurance or ACA plan

Post by snowman »

Agree with a lot of what Watty said. ACA is the way to go, but my suggestion is to talk to at least 2, maybe 3 or even 4 agents that sell ACA plans in Phoenix area first. They can be invaluable (if you find a good one, that's the key!) in helping you select the right plan for you and your family. They will have lots of good info on which groups of doctors partner with which groups of hospitals who then partner with insurance companies etc. They will also provide behind the scenes info on sign up process, estimated income documentation, etc to avoid any known issues/problems.
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Re: Short-Term Health Insurance Plan

Post by hicabob »

naj89 wrote: Mon Feb 24, 2020 7:14 pm My family recently had short-term medical coverage offered via UnitedHealthcare, underwritten by Golden Rule Insurance Company. I had a good experience through them, and their website has a comparison chart of common coverage and issuance differences between an ACA plan and a short-term plan here: https://www.uhone.com/insurance/short-term

After entering numbers into the website estimator the big factor seems to be coverage paid per day in hospital. At $5k / day hospital payments it costs the same as my Bronze HSA ACA plan. Of course if one was unlucky enough to be in intensive care the 5k/day would barely dent the bill.
almostretired1965
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Re: Should I buy short-term health insurance or ACA plan

Post by almostretired1965 »

A cautionary tale on the perils of non-ACA insurance plans:

https://www.wlrn.org/post/miami-man-who ... s#stream/0

You may have better luck with a reputable insurer like UHC, but frankly, I think going without insurance may actually be a better choice if you simply can't afford an ACA plan.
JonnyB
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Re: Should I buy short-term health insurance or ACA plan

Post by JonnyB »

adamthesmythe wrote: Wed Feb 26, 2020 11:22 am I have read that some buying these plans consider a switch to ACA as a backup in the event of unexpected serious medical issues.
You can't just switch to an ACA plan when you need it. You have to wait for the next open enrollment period with coverage starting the following January.

The exception is a qualifying event like losing your employer coverage or moving to a new location out of your current area. But you only have 60 days to enroll or else have to wait for the next open enrollment.
adamthesmythe
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Re: Should I buy short-term health insurance or ACA plan

Post by adamthesmythe »

JonnyB wrote: Wed Feb 26, 2020 2:56 pm
adamthesmythe wrote: Wed Feb 26, 2020 11:22 am I have read that some buying these plans consider a switch to ACA as a backup in the event of unexpected serious medical issues.
You can't just switch to an ACA plan when you need it. You have to wait for the next open enrollment period with coverage starting the following January.
A detail I omitted, which makes ACA even less of a useful backup. Nevertheless, I have read discussion of this as an option.
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JoeRetire
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Re: Should I buy short-term health insurance or ACA plan

Post by JoeRetire »

Hayden wrote: Mon Feb 24, 2020 6:48 pm 1) only about 50% of doctors here take the ACA plans, whereas about 95% of doctors here take the short term medical plans.
Do you have some reason to believe that the doctor(s) you want aren't in the 50% ?
2) the ACA plans only provide coverage in this county, whereas the short term plans provide coverage nation-wide.
Are you planning to seek non-emergency medical care across the country?
3) short-term plans are much cheaper
Are you sure you are comparing apples to apples? There's a rather large range of ACA plans, and probably more than a few short-term plans.

Perhaps you should do some investigation yourself on the healthcare.gov website? It's not clear that this agent knows what they are talking about. Makes one wonder if there's something in it for the agent if you purchase a short-term plan...
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retiredjg
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Re: Should I buy short-term health insurance or ACA plan

Post by retiredjg »

Hayden wrote: Mon Feb 24, 2020 6:48 pm 1) only about 50% of doctors here take the ACA plans, whereas about 95% of doctors here take the short term medical plans.
2) the ACA plans only provide coverage in this county, whereas the short term plans provide coverage nation-wide.
3) short-term plans are much cheaper
Well maybe he's right but I'm mighty suspicious. I think item #1 probably has more to the story and I can't imagine that item #2 is accurate at all. Could be wrong though.

Continue to shop around.
StealthRabbit
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Re: Should I buy short-term health insurance or ACA plan

Post by StealthRabbit »

retiredjg wrote: Wed Feb 26, 2020 4:01 pm
Hayden wrote: Mon Feb 24, 2020 6:48 pm 1) only about 50% of doctors here take the ACA plans, whereas about 95% of doctors here take the short term medical plans.
2) the ACA plans only provide coverage in this county, whereas the short term plans provide coverage nation-wide.
3) short-term plans are much cheaper
Well maybe he's right but I'm mighty suspicious. I think item #1 probably has more to the story and I can't imagine that item #2 is accurate at all. Could be wrong though.

Continue to shop around.
I too am suspicious since this recommendation was from an Insurance agent who will likely profit from your choice to use them.

I have used private coverage, ACA and HC Sharing ministries as 'bridges' to HC. They all have their place.
Age, risk, time frame, expense... make a spreadsheet, get the quotes, make a choice.
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Tamarind
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Re: Should I buy short-term health insurance or ACA plan

Post by Tamarind »

The agent appears to be leaving out significant limitations of the short term plans, which others have already listed.

I'll just note that if you are moving to the area and intend to stay, you should get insurance, then find a doctor who takes insurance. Seems backwards to do it the other way around since you have no reason to be attached to a doctor, yet.

The cheapest ACA plans do sometimes have limited networks, for instance within a county. However if do need to see someone outside, for instance if you get in an accident, you will still be covered, just out of network. You might have a higher deductible but for catastrophic events not much of a difference.
InMyDreams
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Re: Should I buy short-term health insurance or ACA plan

Post by InMyDreams »

There are several threads that discuss the pros and cons of ACA compliant vs short term insurances. Here's one:
viewtopic.php?f=11&t=257097
Freetime76
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Re: Should I buy short-term health insurance or ACA plan

Post by Freetime76 »

Tamarind wrote: Wed Feb 26, 2020 4:50 pm The agent appears to be leaving out significant limitations of the short term plans, which others have already listed.

I'll just note that if you are moving to the area and intend to stay, you should get insurance, then find a doctor who takes insurance. Seems backwards to do it the other way around since you have no reason to be attached to a doctor, yet.

The cheapest ACA plans do sometimes have limited networks, for instance within a county. However if do need to see someone outside, for instance if you get in an accident, you will still be covered, just out of network. You might have a higher deductible but for catastrophic events not much of a difference.
OP: check the rules carefully and, if you qualify, get the ACA plan as soon as possible-or at least watch the dates. There is a window after you move and also after (gap) from when you last had insurance. We qualified after a move, but I almost missed our deadline. The plan options will be more limited than during Open Enrollment...we chose a bronze plan with an HSA, but that’s us.

Many years ago, we used Golden Rule (UHC) as an emergency backup - I.e. if disaster strikes medically, we won’t be bankrupt- high deductible of maybe 10,000, and we had it just for a few months. Disaster didn’t strike, so we didn’t even use it ($100/month for two adults). Just recently, we had a negative experience with Tthem, where I tried to enroll us :annoyed and they couldn’t even get the policy approved before we didn’t need it anymore - 2 months.. I think it was a few weeks to get the application processed and then a period of time before it was active. So I cancelled it. Ridiculous. The exclusions were lengthy with no guarantee of renewal. As I said, it would be ok as an emergency stop-gap to keep us from going bankrupt...if something happened to one of us, we’d be frantically searching for a job that had full benefits...
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Sandtrap
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Re: Should I buy short-term health insurance or ACA plan

Post by Sandtrap »

Hayden wrote: Mon Feb 24, 2020 6:48 pm I am in the process of moving to the Phoenix area and i need to buy individual health insurance here. Just spoke with an insurance agent who recommended a short term medical plan, rather than an ACA plan. His reasons are:

1) only about 50% of doctors here take the ACA plans, whereas about 95% of doctors here take the short term medical plans.
2) the ACA plans only provide coverage in this county, whereas the short term plans provide coverage nation-wide.
3) short-term plans are much cheaper

So, what are the downsides to signing up for a short term medical plan, rather than an ACA plan? Why would one pick an ACA plan over a short-term plan?
It depends on the policy coverage as far as maximum limits.
This is where many of the "non ACA" policies fail.
But, it may seem like so many of the ACA policies offer the luxury of spending very high premiums and penalties for what seems like zero coverage, especially with high deductibles, however, if there is something catastrophic over a long term, the ACA policies will often come into play.

Fore example:
I had to suffer with the ACA policy for 4 years before Medicare kicked in. Premiums were expensive, and the penalties were huge for going over the AVA Subsidy Cliff. At the same time I had huge medical expense for 1 year and the coverage was dismal. So, I had to think of the AVA Policy as more like a Life Insurance Policy. Useless for day to day expenses but handy in a severe catastrophy.
I did try the "short term or limited term policies" as well when the "mandate" was in effect, and the costs were not all that much less, coverage still dismal, deductibles still impractical, but it served a purpose at the time.

I Arizona, there was only one ACA provider who called the "shots", Blue Cross Blue Shield, although, there might be 3 providers in 2020, unsure.
The agent was wrong about no National Coverage. I used my ACA Blue Cross Blue Shield in Hawaii as well. It's just that the coverages may be different, not none.

IMHO: the insurance agent you spoke to is trying to sell you a policy. The numbers he's quoting is not true. It depends largely on what doctors you go to, what services you generally need, etc, etc.
And, the "short/limited term" policies are not all that much cheaper and sometimes end up more because you have to piece together supplementals to cover the holes in coverage.

Actionably: you need to speak to the ACA consultants as well, and also various policy holders, not the insurance "salesman".

*Beware of the "short term, limited term" health insurance policies. They can be as tangled as getting aftermarket extended warranties on a toaster oven.

IMHO: try to get the ACA Policy that you can afford. Be vigilant as to sign up windows. Etc.

Arizona Resident
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SandysDad
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Re: Should I buy short-term health insurance or ACA plan

Post by SandysDad »

Hayden,
The insurance agent is biased. Well documented that commissions on short term plans incents agents to sell it.

Its not just about pre-existing conditions. There is a reason short term plans are cheaper.....they don't pay when the S hits the fan.

So here it is. 99% chance you won't need what ACA provides if the S hits the fan. But if you are the lucky 1% who have that very expensive and critical need, can you afford to self pay without the benefit of the insurers negotiated rates? My guess is no. But you can afford to insure yourself via the ACA.

So pay the ACA premium. Just consider it part of your living expenses.

If it makes you feel better, by law ACA plans pay out 85%+ in claims. All admin and profit has to fit in the 15%. So consider your ACA premiums "paying it forward"....for the 1%
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Shackleton
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Re: Should I buy short-term health insurance or ACA plan

Post by Shackleton »

Keep in mind that aside from short term insurance, there is also the possibility to buy "non-marketplace" or "off-marketplace" insurance. This is insurance that MEETS all the ACA requirements, is true health insurance (not short term insurance), but is purchased direct through the company site rather than the state's ACA exchange. I'm currently searching for health insurance and in my state (CO), on the exchange site I was quoted the Anthem Silver 5500 plan at $2057, but going to the Anthem site, the same policy in the "off-marketplace" version was $1857. Exact same coverage, deductibles, limits, OOP max. The major difference is that you CANNOT get a tax credit or cost sharing with the off-marketplace plan. Additionally, many of the off-marketplace plans have a LARGER network of doctors. So, if you know you will not quality for credits/cost sharing, I'd encourage you to look at quotes from the insurance provider direct on their site.

Details about non-marketplace vs marketplace insurance:
https://www.healthcare.com/non-marketpl ... ance-28208
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Hayden
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Re: Should I buy short-term health insurance or ACA plan

Post by Hayden »

Shackleton wrote: Fri Feb 28, 2020 8:59 am Keep in mind that aside from short term insurance, there is also the possibility to buy "non-marketplace" or "off-marketplace" insurance. This is insurance that MEETS all the ACA requirements, is true health insurance (not short term insurance), but is purchased direct through the company site rather than the state's ACA exchange. I'm currently searching for health insurance and in my state (CO), on the exchange site I was quoted the Anthem Silver 5500 plan at $2057, but going to the Anthem site, the same policy in the "off-marketplace" version was $1857. Exact same coverage, deductibles, limits, OOP max. The major difference is that you CANNOT get a tax credit or cost sharing with the off-marketplace plan. Additionally, many of the off-marketplace plans have a LARGER network of doctors. So, if you know you will not quality for credits/cost sharing, I'd encourage you to look at quotes from the insurance provider direct on their site.

Details about non-marketplace vs marketplace insurance:
https://www.healthcare.com/non-marketpl ... ance-28208
I've checked the insurance company websites, and they are not offering off marketplace plans.

I've done that in the past in my former state. It is too bad it is not an option in my new residence.
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Hayden
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Re: Should I buy short-term health insurance or ACA plan

Post by Hayden »

SandysDad wrote: Fri Feb 28, 2020 8:48 am
So pay the ACA premium. Just consider it part of your living expenses.

If it makes you feel better, by law ACA plans pay out 85%+ in claims. All admin and profit has to fit in the 15%. So consider your ACA premiums "paying it forward"....for the 1%
Agreed
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Hayden
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Re: Should I buy short-term health insurance or ACA plan

Post by Hayden »

Thanks, everyone, for the help. I have signed up with HealthCare.gov. Now I need to cancel coverage in my old state, and upload proof of the cancelation to HealthCare.gov.

I tried to cancel with my old state Exchange over the telephone yesterday, but it seemed like that would give me a cancellation date of 2/29, which I didn't want (can't get the new insurance in place that quickly). So I told them I would call back on Monday to cancel. You would think they would allow you to specify the cancellation date, but alas, that was not possible.
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Sandtrap
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Re: Should I buy short-term health insurance or ACA plan

Post by Sandtrap »

Hayden wrote: Fri Feb 28, 2020 10:13 am Thanks, everyone, for the help. I have signed up with HealthCare.gov. Now I need to cancel coverage in my old state, and upload proof of the cancelation to HealthCare.gov.

I tried to cancel with my old state Exchange over the telephone yesterday, but it seemed like that would give me a cancellation date of 2/29, which I didn't want (can't get the new insurance in place that quickly). So I told them I would call back on Monday to cancel. You would think they would allow you to specify the cancellation date, but alas, that was not possible.
Great job!

The whole health insurance thing has turned into quicksand and landmines over time.
Tread carefully.

j :happy
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