Buyer beware: short-term health insurance plans are cheap for a reason

This fall, open enrollment for health insurance brings additional options for consumers. Alongside the usual suite of insurance plans available since the passage of the Affordable Care Act (ACA), you now have the option to enroll in a newly expanded short-term health insurance plan. 

The low monthly premium of these plans may look particularly appealing. However, short-term plans are characterized by large gaps in coverage and high out-of-pocket costs. Therefore, it’s important to research your choices and assess your health care needs, ultimately ensuring you enroll in the right plan for you. 

Traditionally, short-term health insurance plans served as a temporary stopgap for individuals facing a brief period without coverage. For example, if you switched jobs and had a gap between employer-sponsored coverage or if you recently graduated and transitioned off your parents’ insurance, you may have taken advantage of a short-term plan. 

These plans were limited to three months without the ability to renew. The federal government recently expanded the scope and availability of these plans. Starting this fall, short-term health plans can now last 364 days and be renewed for 36 months. This change was intended to increase health insurance options for people purchasing individual or family coverage. 

The low monthly premiums of short-term plans come with a tradeoff: drastically reduced coverage. Short-term plans are not required to provide any of the patient protections the ACA established. They do not have to cover pre-existing conditions, like psoriasis or psoriatic arthritis, or offer essential health benefits. 

Short-term plans can impose caps on coverage, including limiting the number of visits or placing financial limitations on what’s covered. In fact, a recent analysis shows that 71 percent of plans do not cover prescription drugs, and those that do placed a cap on the dollar amount of coverage. Additionally, nearly half of the plans don’t cover mental health services, and none of the plans analyzed covered prenatal services.

Furthermore, short-term plans are often subject to medical underwriting, which means you can be denied coverage or charged a higher premium due to your health status, age or gender. Providers of short-term health insurance plans will review your medical records to determine what they will cover, what limits they will impose and how much they will charge. This review may occur when you enroll and when you file claims, meaning coverage denials and high medical bills may surprise you at any point. 

Short-term health plans do fill an important need when people are faced with a temporary gap in health coverage and want some protection against high medical costs. However, for members of the psoriatic disease community, these plans are unlikely to provide truly adequate coverage. 

These plans can refuse to cover any of your medical care related to your psoriasis or psoriatic arthritis, including doctor’s visits, medications, phototherapy or physical therapy. The low premium may catch your eye when shopping, but that monthly amount fails to offer a full or accurate picture of the costs associated with these plans. 

Get support while shopping 

Remember, NPF is here to help! Request a free Health Insurance Quick Guide to learn more about selecting a plan. Our Patient Navigators can answer your questions and connect you to in-person assistance to help you select a plan that offers the best coverage at the lowest possible price.

Driving discovery, creating community

For more than 50 years, we’ve been driving efforts to cure psoriatic disease and improve the lives of those affected. But there’s still plenty to do! Learn how you can help our advocacy team shape the laws and policies that affect people with psoriasis and psoriatic arthritis – in your state and across the country. Help us raise funds to support research by joining Team NPF, where you can walk, run, cycle, play bingo or create your own fundraising event. If you or someone you love needs free, personalized support for living a healthier life with psoriatic disease, contact our Patient Navigation Center. And keep the National Psoriasis Foundation going strong by making a donation today. Together, we will find a cure.

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