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Short-term insurance sees boost since ACA

Posted by Christine L. Tricoli

When the Affordable Care Act came into effect, one of its primary goals was to hold all health plans to a more robust standard. Starting Jan. 1, 2014, every new plan would cover 10 "essential" health benefits with no dollar limit.

Two years later, however, The Wall Street Journal reports that the ACA has fueled an increase in sales for health plans that do not meet these standards. 

In a recent article outlining this phenomenon, the WSJ cites insurance agents who say sales of short-term health plans have spiked since the 2014 deadline. Originally intended for people who needed brief coverage between major policies, these temporary plans do not meet ACA requirements, such as covering pre-existing conditions and prescription drugs without a cap. However, the WSJ reports consumers on limited budgets have found the plans to be more effective than ACA plans, even after sustaining considerable fines for lack of compliance.

The article cites several insurance agencies that reported significant sales increases for these types of plans since 2013 — the year before the ACA deadline. For example, eHealth sold more than twice the number of short-term plans last year than it did in 2013. What's more, a survey by the agency found that more than half of respondents chose the temporary plan because of price, as opposed to just 39 percent who said it was for short-term coverage. 

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Of course, opting for cheaper, limited options isn't without its own share of risks. While minimal coverage may appear enough for consumers who are in seemingly good health, some short-term plans may not offer much support if something goes wrong. By not capping annual or lifetime costs for hospitalizations or prescription drugs, for example, they could leave optimistic consumers with massive hospital bills if illness struck. 

Before you choose the best health plan for yourself or your employees, be sure to understand not just its benefits, but its limitations as well.

Posted by Christine L. Tricoli

Christine Tricoli is manager of Business Development for Kelsey-Seybold Clinic. She joined Kelsey-Seybold in 2004. She is responsible for developing new business relationships with key business leaders, plan sponsors and the brokerage community. Prior to joining Kelsey-Seybold, Christine was a senior sales account executive for a major health insurance company in the Houston market. She brings more than 30 years of experience in managed healthcare in Houston. Christine holds a Bachelor’s in Business Administration and a Group 1 Insurance License. She is fluent in Spanish.

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Topics: Healthcare, Short-term insurance, ACA

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