Short-term health insurance plans, commonly called “junk” plans, are finally being subject to appropriate limitations that will benefit the health insurance industry as a whole.
Health insurance is absolutely essential for most people, especially older adults with aging bodies and chronic health issues. Unfortunately, the world of health insurance can be confusing, expensive, and downright predatory. One of the current healthcare options under fire is short-term health insurance, also known as “junk” plans.
What are “junk” plans?
Short-term health insurance plans, commonly called “junk” or “skinny” plans, were originally established as an emergency insurance coverage option for those who lost employment or suffered another circumstance that landed them without health insurance coverage. According to the AARP, these plans were originally limited to a period of approximately three months, as they were simply meant as a stopgap measure to maintain health insurance coverage during a temporary situation until the individual could access proper healthcare insurance again. Unfortunately, these policies have been allowed to extend themselves beyond a reasonable scope, offering coverage for up to three years instead of three months. The ability to extend emergency coverage sounds like a good thing, but it brings some significant problems to the table.
Why are they problematic?
At their inception, these limited health insurance plans were one of the only options available to individuals who were in crisis and required access to quick, simple health insurance. Thankfully, we now have the Affordable Care Act (ACA), which allows individuals to seek out appropriate health insurance based on their circumstances. ACA coverage is significantly more robust than short-term health insurance plans, even at the base level. In fact, according to the departments of Health and Human Services, and Labor and Treasury, these limited insurance plans have become more of a predatory practice meant to trick people into buying in even though plans often “provide little or no coverage when [policyholders] need it most.”
They’re Cheaper, But…
These plans cost less than nearly any other plan, which makes them a tempting choice, especially for those in an emergency situation with limited funds to dedicate to their healthcare plan. Unfortunately, that lower cost also comes with much lower coverage, and many individuals with this limited insurance will find that even basic medical care is not covered. The companies that promote these policies will often use misleading sales tactics to make the plans sound much better than they are, roping unwitting consumers into paying for a policy that will fail to protect them if they become sick or if they are already sick and need continuous care (since they do not cover pre-existing conditions).
They Remove Money From the System
The problems don’t stop there, though. Brendon Rose, an AARP director of government affairs, explains that the majority of individuals who have short-term health insurance are young and healthy, and they do not have any kind of conventional insurance. This is detrimental to older adults because they are using conventional health insurance, but their premiums continue to rise because premiums from young and healthy individuals are not available to offset the costs incurred by those who are older or suffer from chronic illness.
How will this legislation help older adults?
The federal government is taking a step in the right direction by making these plans limited again—they will still be available for those who need them, but will only be available for a period of three months, with a one-month extension if it is needed. The other important aspect of this legislation is that it will require companies that sell these policies to have much more clear verbiage when describing what these policies will actually cover, allowing consumers to make an informed decision on whether the policy is right for their needs.
This step can make life easier for older adults by offsetting healthcare costs for everyone, particularly older adults who require more healthcare than young and healthy individuals. It also minimizes predatory practices by these insurance companies and ensures that more people, especially older adults who are not yet qualified to receive Medicare, do not fall victim to these policies and miss out on critical care that they need to stay safe and healthy.
If you are an older adult and have any questions about short-term health insurance plans or any other healthcare plans, remember to talk to a trusted benefits advisor, such as Aging Benefits Advisory. Talking to someone can help you break down the lingo and get to the information that is important to you so that you always know you’re properly covered no matter what kind of policy you choose.
Contact Aging Benefits Advisory Today!
If you need help navigating the world of senior health insurance, our advisors at Aging Benefits Advisory are here to assist. Take advantage of our free consultation to ensure that you receive the plan for your budget and needs. We specialize in Medicare Advantage, Medicare Supplements, Dental, Vision, and Final Expense insurance for the senior market of Pinellas County, Pasco County, Manatee County, Hillsborough County, Polk County, Sarasota County, Citrus County, and Marion County, Florida. If you would like a free consultation, contact us online or give us a call at 727-266-0355. For more information, follow us on Facebook, Pinterest, and YouTube.