(Jacob Hannah/The New York Times)

Short-term health plans offer cheaper rates compared to ACA-compliant plans

People with sticker shock over the cost of insurance on the Affordable Care Act exchanges this year will have a wave of short-term health plans to consider, which are much cheaper but also can mean slashed benefits and no coverage for pre-existing conditions.

Newly loosened regulations have made these temporary plans once again available for year-long terms with a chance to renew and about a dozen are for sale in the state, according to the Ohio Department of Insurance.

The more than 32,000 people in the nine-county region surrounding Dayton who signed up for ACA insurance this year are eligible for these plans in 2019.

But these plans are cheap for a reason, with many not covering pre-existing conditions, maternity care or prescription drugs, and Ohio Department of Insurance Director Jillian Froment cautioned consumers to carefully review options.

“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,” Ohio Department of Insurance Director Jillian Froment said in a statement.

Open enrollment runs through Dec. 15 for plans sold on the exchanges created by the Affordable Care Act, also known as Obamacare. But new this year, since the individual mandate has been repealed, Ohioans won’t pay a penalty for buying a short-term plan instead of a ACA-compliant plan sold on the exchanges.

Short-term insurance premiums could cost less than half the price of a plan sold on the exchanges, which for 2019 will have an average premium in Ohio of $6,161.56, up 6.3 percent from the year before.

Short-term plans had been limited to 90-days — intended to restrict these plans as a stop gap between other coverage — but the Trump administration rolled back restrictions on short term plans, which means consumers can once again buy temporary plans for up to a year of coverage and can also renew for up to 36 months of coverage.

Short-term plans don’t have to comply with the Affordable Care Act regulations, so they don’t have to cap out-of-pocket costs, can have an annual limit on benefits and the insurance companies can spend a larger percent of premiums on overhead. They can either refuse to cover or place limits on covering pre-existing conditions, dependent children, certain mental illnesses, prescription drugs and maternity coverage.

Dayton-based CareSource, which sold about 90,000 individual plans last year, is promoting that it is selling ACA-compliant plans. The insurer stated its plans to offer all of the essential health benefits including prescription drug coverage, maternity care, mental health and substance use disorder services.

“The Marketplace is still the best option for finding a plan to fit a range of health care needs and finances,” said Robert Brett, CareSource marketplace vice president.

Major medical health insurance plans are not allowed to exclude pre-existing conditions. However, Froment stated 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.

The Ohio Department of Insurance said when thinking about buying a short term plan, to also consider that there may be a significant gap between what a short term plan pays and what a hospital charges. Short-term plans may include a fixed “per day” payment rate for things like a hospital stay.

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.

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