Many Americans are facing the burden of high health insurance premiums, forced to either pay a hefty dollar amount or risk going without coverage. There is however, a saving grace: short-term, limited duration insurance. Short term is not anything new to the ball game, however, Obamacare limited the coverage to three months, without the option to renew. Under the Trump administration, short-term can now be allowed to last up to 12 months, with guaranteed renewability of up to 36 months, subject to state regulations. This newest option protects the consumer from rate increases during this time should they get sick.
Currently, annual premiums for a single individual top $6,600, and families pay more than $18,000.
While short-term is not comparable to full medical coverage, it does provide some compensation in the event the policyholder becomes ill. Since this type of plan has a substantially lower price than the insurance consumers can purchase through Obamacare, it may prove to be a better option for some individuals. Short-term plans are cheaper since they do tend to cover fewer medical expense and do charge higher prices for people with pre-existing conditions. For this reason, short-term policies are often bundled with additional products to provide more comprehensive coverage. Dental, vision, accident and critical illness are examples of additional benefits which are commonly added with a short-term policy.
A standard silver plan under the ACA now averages $481 a month for a 40-year old non-smoker. A short-term plan might cost as little as $160 a month, according to some estimates.
Those that will benefit from this plan include Americans who do not have access to health insurance coverage due to not working full time at one place, independent contractors, or those who are in between jobs. Short-term plans offer multiple options and price ranges relating to deductible costs to meet budget needs. Although these health plans do not satisfy the individual manage for health insurance, beginning 2019 this will no longer carry a penalty.