Popular alternative to ACA plans could help over 8 million consumers keep insurance during times of transition
SCOTTSDALE, Ariz., April 5, 2018 /PRNewswire/ -- Pivot Health, a leading provider and manager of specialty health insurance products, defined 10 ways short term health plans can benefit consumers who would otherwise be uninsured or lack sufficient coverage due to changes in their life situation.
"An Affordable Care Act (ACA) plan is a fine solution for individuals and families who qualify for financial subsidies to lower their health insurance costs. But for the 8 million Americans who don't qualify for an ACA plan subsidy and for those in a variety of life events, they should know there are other affordable options," said Jeff Smedsrud, Chief Executive Officer of Pivot Health. "When life throws a curveball, short term health plans can be a low-cost insurance solution while covering doctor office visits, hospitalization and more. It is a niche, temporary solution, but a large overall market."
Smedsrud compiled a list of 10 life situations when short term health insurance could make the most sense for a health care consumer:
- Joining the "gig" economy - At the end of 2016, the percentage of new entrepreneurs starting their own companies was 7.4 percent - the highest it has been in four years. A recent study credited a rebounding economy, easy-to-obtain credit and hopes for an Obamacare repeal and tax reform under the Trump administration as reasons for the surge. For new business owners or solopreneurs, being able to obtain immediate and affordable health insurance coverage is a key component to their personal success. Short term medical insurance can start in just 24-hours and costs about 50% less than traditional health insurance.
- Stuck in employer waiting period - The unemployment rate across the nation is at an all-time low due to recent economic upturn. With a robust economy, workers can jump from job to job to ultimately land their ideal career. Yet many times employers have a 90-day waiting period before health insurance benefits begin. A temporary short term health plan helps bridge the gap for workers who are between jobs or stuck in a new employee waiting period.
- Moving to new state - In 2016, about 7.5 million Americans moved to a new state. When an individual with an ACA plan moves, their insurance certificate is no longer valid in their new state of residence. They can certainly enroll in another ACA plan once they have settled in their new home, but time and paperwork can delay coverage. In addition, the deductible starts over which is a big disadvantage to those who move late in the year. Short term medical with a lower deductible can serve as a temporary solution to provide immediate coverage for an unexpected illness or accident that occurs.
- College Students. Students are allowed to stay on their parent's health insurance plan until the age of 26. But not all insurance companies will cover students attending college out-of-state. It could also be less expensive to remove a student from a parent's policy and enroll in a short term health plan, a quick and easy solution for the months a student is away at school.
- Aging off parents insurance plan - The ACA allowed parents to keep their adult children on their family plan until the age of 26. Children who do not have access to employer coverage or need a more affordable option can benefit from low-cost short term health insurance. This is especially important for those who age off of their parent's plan later in the year. A short term plan can be an excellent bridge of coverage to January 1.
- Early retirees - When examining a larger demographic of 50-64-year old women, Pivot Health sales data shows this group completed the most applications on its website in 2017 when looking at gender-specific data. Early retirees who do not yet qualify for Medicare but have too much household income to qualify for an Obamacare subsidy, can find a new option through short term medical that is friendly to budget-conscious, not-quite-yet-senior-citizens who are retiring early. Pivot Health estimates that nearly one million pre-retirees may be best served by – but should at least consider – a short term medical plan.
- Freedom from doctor network - In 2017 1.9 million individuals who enrolled in an ACA plan only had one insurance carrier to choose from, often with restricted provider networks. This limits health care choice, especially in rural communities where provider resources are thin. Short term health plans marketed by Pivot Health have no doctor network. All providers are accepted, giving policyholders the ability to see any physician or facility without the worry of staying in-network.
- Divorce - More than 825,000 individuals divorced in 2017. In almost every case, one of the two partners needs to adjust their health insurance coverage, even temporarily. Women are at a greater risk of losing their insurance. A government study indicates that approximately 115,000 women lose their health insurance in the months following divorce. A short term health insurance plan can be purchased for a minimum of 30 days or for multiple months, depending on how long someone going through a divorce needs to get back on their feet.
- Too rich for Medicaid, too poor for subsidies - Across the U.S., 2.4 million people don't make enough to qualify for a tax credit to purchase health insurance on the ACA exchange, yet make too much money to qualify for Medicaid benefits. This group of "coverage gap" individuals could benefit from low-cost short term insurance.
- COBRA - The Consolidated Omnibus Budget Reconciliation Act (COBRA) provides individuals who lose their job the ability to keep their health insurance for up to 18 months. The Bureau of Labor Statistics reports approximately 36 million Americans changed jobs in 2017. They might have the option to enroll in a COBRA plan, but the cost is far from economical. When an individual enrolls in COBRA, they must pay the entire insurance premium plus a 2 percent administrative fee. Many would be better off purchasing a short term health plan and saving their extra dollars while they job hunt. Additionally, those who had been employed by firms with less than 20 employees are not eligible for COBRA.
Today short term medical plans are restricted to 90-days of coverage. However, a proposal to overturn the 90-day limitation was recently issued by the Trump administration. The Department of Health and Human Services (HHS) is accepting comments about the proposal through the end of April 2018. It is expected HHS will reverse the rule at the end of 2018, allowing short term health insurance plans to have a coverage duration of up to 364 days. Short term plans generally do not cover pre-existing conditions, can deny coverage to individuals with chronic health conditions, have leaner benefits than ACA plans and are not considered qualified health benefits for purposes of premium subsidies based on income.
"Truth is, the short term medical insurance market is much bigger than experts estimate and helps millions get coverage and keep from being uninsured," said Smedsrud. "It is not for everyone nor should it be considered a permanent plan. But there are millions who need temporary coverage because there are lots of curveballs in this turbulent time. Our plans provide easy enrollment, next day coverage, access to all medical providers, the ability to tailor plans to meet current needs, offer monthly pricing to meet many budgets, plus prescription drug benefits."
About Pivot Health
Launched in 2016, Pivot Health is an insurance product development, management and marketing company led by an experienced team of health insurance professionals that have managed over $7 billion of insurance premium. The company has proprietary products and dedicated relationships with several national carriers. The founders of Pivot Health have led previous firms that were acquired by NYSE listed companies. Pivot Health recently announced it was acquired by HealthCare.com (www.healthcare.com), a privately-owned search-and-compare health insurance shopping platform. For more information, visit www.pivothealth.com.