Economics and risks of short-term medical insurance

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michaeljc70
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Economics and risks of short-term medical insurance

Post by michaeljc70 » Fri Dec 07, 2018 11:23 am

I have a week left to decide on a ACA plan or short-term plan for 2019. As a point of comparison, for us (2 people in their 40s), the cheapest ACA plan is around $767/mo and has a $7200 deductible pp. The short-term plan is $206/mo for a 6 mos plan, 20% coinsurance, $2500 deductible and $1M max. For $343 the same exact plan is offered for 12 months.

My questions are:

-Why is it so much more for the 12 month plan than the same 6 mo plan? Is it that they are unlikely to renew you on the 6 month plan if you have claims? If you get stuck without coverage in the middle of the year, it seems you have few options.

-I know these plans exclude pre-existing conditions. Are they underwritten? Or do they just go back if you have a claim?

-The short-term plans include prescriptions for inpatient only. I take no prescriptions now, but I worry that I will get something that requires very expensive drugs. I know it isn't likely, but is that a risk I want to take?

-Since these are indemnity plans, I believe I wouldn't get the network discount for the short-term plans. These are typically 50% for a doctor visit and up to 90% off for scans, x-rays and lab work.

It is unlikely I would get a subsidy in 2019 (but not completely impossible). Do these added risks warrant saving a few thousand dollars a year and going with the short-term plan? Is it worth paying 70% more to get the 12 month plan to know I won't be cancelled mid year and left without coverage?
Last edited by michaeljc70 on Fri Dec 07, 2018 11:55 am, edited 2 times in total.

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nisiprius
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Re: Economics and risks of short-term medical insurance

Post by nisiprius » Fri Dec 07, 2018 11:41 am

I think your questions are their own answer. You are not going to get simple, reliable answers here and probably not anywhere. Everything is going to depend on the exact particulars of the specific policy and the specific condition, and on the insurers' unstated unpublicized policies (do they customarily play hardball and look hard for reasons to deny?)

And no matter what the "summary of benefits" booklet says, when it comes down to specifics it is always what is in the "contract" which can run to over a hundred pages and may even be hard to get a copy of.

In addition to the risk of medical costs, you are also bearing the risk of not knowing what your coverage actually is.

I have had insurers balk at paying claims I thought were obviously covered, and, yes, I have also had them pay claims I submitted for things I thought were obviously not covered. (I once paid a lot extra for a plan that offered "out-of-network" coverage (with 20% copay), and had a claim denied because they told me that the provider was neither in-network nor out-of-network.)
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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