What you need to know about short-term health plans

Submitted by OHIO DEPARTMENT OF INSURANCE

COLUMBUS — New rules from the federal government are increasing the availability of temporary health insurance products known as short-term health plans. Ohio Department of Insurance Director Jillian Froment is urging Ohio consumers to review and consider the specifics of short-term, limited duration plans prior to purchase. Because of the changes at the federal level, the Department has been fielding a number of inquiries and questions related to these products.

“As with all insurance products, Ohioans should carefully review all their coverage options to find a plan that best meets their needs” Froment said. “Short-term health plans can be an appropriate choice for some consumers.  However, there is a difference in the level of coverage consumers can find with a product that meets all the requirements of the ACA versus these plans.”

Major medical health insurance plans (employer plans, Medicare, Medicaid or plans purchased on healthcare.gov) offer broad coverage, cannot exclude pre-existing conditions, and will cover many consumer needs, though specific benefits and cost-sharing will vary by plan. Additionally, major medical insurance plans offer protections by prohibiting insurers from using health status when determining premiums. However, while major medical plans offer more comprehensive coverage, they can also be expensive and include high deductibles and out-of-pocket costs – particularly if subsidies are not available.

Short-term, limited duration plans are different. These plans provide coverage for less than 12 months, a shorter period than a traditional health insurance plan, and are not required to provide the same level of benefits that major medical plans provide. In addition, short-term, limited duration plans can generally refuse to issue coverage or charge higher premiums based on health status. These types of plans also have more exclusions on what the plan will cover and are not required to cover pre-existing conditions, though some may.

For instance, short-term, limited duration plans may not include, or may place limits on, things like coverage for:

• Dependent children
• Biologically based mental illnesses
• Pre-existing conditions
• Maternity
• Prescription drugs

Short-term plans may also include a fixed “per day” payment rate for things like a hospital stay. It is important for consumers to have a general sense of how much a hospital stay costs in order to understand how much the plan will or will not cover in the event of a hospital stay. The gap between what a short-term plan pays and what the hospital charges may be significant. Consumers can find information about their local hospital’s general pricing on their website. Other limitations may apply, so it is important to review policies carefully with a licensed insurance agent in order to help find the plan that meets their needs.

There are several key facts to know if considering a short-term plan, including:

• These plans are not required to cover essential health benefits (like maternity, prescription drug, mental health, or comprehensive hospital benefits) and do not meet minimum coverage requirements. Though the penalty for not having qualifying health insurance will be removed starting January 2019, it is important for consumers to understand they may incur penalties for the remainder of 2018 if they do not maintain qualifying coverage.
• Consumers should ask about the plan’s limitations, cost-sharing, maximum amounts the plan will pay as well as exclusions to fully understand the plan being considered.
• Ohio insurance regulations require plans to provide information to consumers about any limitations or restrictions related to networks and access to providers, if applicable.
• Consumers can appeal any claim denials, or other adverse decisions, initially to the insurance company and then to the Department, if necessary.
• Consumers can purchase these plans directly from the insurer or through a licensed insurance agent. Consumers can find a list of licensed insurance agents on our website at insurance.ohio.gov.

Consumers with questions about health insurance or short-term, limited duration plans can call the Ohio Department of Insurance at 1-800-686-1526.