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Health insurance is always a hot topic, especially when politicians are involved. Last Summer, the Biden Administration made a ruling that will greatly impact alternative coverage options and their term durations. In late Spring of this year, they determined an effective date of when these changes will occur. Let's quickly discuss the recent history, when these changes will happen, and how it can affect you.
A Quick History
In 2013, the Affordable Care Act became law. Since these plans have premiums based off income, many American's were left scrambling with the rising costs. That's where, and when, alternative options like Short Term Medical plans and Health Shares gained popularity. Since Short Term Medical plans were intended to fill a "gap" in coverage (hence the name) their maximum term length was usually no more than 90 days. In 2018, the Trump Administration decided that American's needed more flexibility with this, and allowed each state to determine their own regulations regarding term durations. The great news was that many states decided to allow these plans to cover consumers for much longer periods of time, up to 3 consecutive years in some cases! "Short Term" no longer, this insurance became increasingly popular due to things like affordable rates and child only policies.
What's happening? And when?
The Biden Administration felt that consumers had been utilizing these types of plans for much longer than intended and since price was a big determining factor, felt many Americans were therefore underinsured. Short Term Medical plans were never meant to be the perfect fit for everyone. Since they are not federally regulated, there are many things they do not cover or have limitations on - pre-existing conditions being one of them. But they have been great for many people like young families, self employed individuals, and healthy seniors approaching Medicare age. Starting September 1st, 2024, Short Term Medical plans will be going back to their original term duration - just 90 days, nationwide.
That sounds a bit...scary. What can I do to ensure I'm not stuck?
Don't bite your nails too much! Luckily, any plan with an effective date before 09/01 will not be impacted. These will be "grandfathered" in. As agents, we have been recommending that if a client is happy with their current coverage, we submit a new application before the changes occur to ensure you're protected for as long as possible. This is especially true in those states that currently offer 3 consecutive years of coverage like Florida, Texas, Arizona, and many more.
What if I don't make changes or enroll before September 1st?
There will be a few different ways to proceed. If you currently have a Short Term Medical plan that expires after 09/01, your coverage will end once the term is over. At that point, we can review the 3 month options if you'd like. One major downfall of this, however, is that deductibles reset every time a new application or term is started. Another option would be switching to something like a Health Share. These are generally through Christian ministries, although there are a few that do not have religious ties. Since they are not "Short Term", they are not affected by these changes. Share plans generally run on an annual basis and coverage will stay active as long as your monthly contribution amount (premium) is drafted. Option #3 would be switching to the Affordable Care Act during the "Open Enrollment Period". OEP begins November 1st each year and runs until December 15th. Your chosen plan will then begin on January 1st.
As always, I'm here and happy to help! Insurance can be confusing - especially with the frequent changes. So let me make the process easy for you!
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