Again, the plans can also not be renewed, though in some states, a client could buy a short-term plan for three months through one carrier and then purchase another short-term plan through another carrier.
The Trump administration has proposed extending these plans to cover consumers for up to 364 days and allowing for renewals, making these plans a more competitive option against comprehensive health plans.
Questions To Ask
If your client is asking for your opinion on short-term plans, there are two key questions to ask.
First, what is the client trying to insure against? If they are just trying to have coverage for an unexpected trip to the emergency room or any kind of catastrophic medical scenario, a short-term plan can be a good fit. If the client is looking to be covered for preventive care or chronic condition management, this is not a good option.
Second, how long is the client needing coverage? Short-term plans may be a good fit for clients currently in a benefits waiting period for a new job, or for those who are retiring a few months before Medicare eligibility. But if the client is retiring several years before Medicare eligibility, or otherwise losing access to coverage for a longer period of time, a short-term plan may not be the right choice.
Two Scenarios Where Short-Term Coverage May Work
Short-term plans aren’t new, and they’ve been used appropriately for years by Americans bridging gaps between more comprehensive, longer-term coverage.
But as the cost of traditional, comprehensive insurance rises, more and more Americans are seeing an opportunity to use short-term plans as long-term fixes. Clients, or clients’ dependents, who are generally healthy and are not anticipating a lot of care needs may find this a good option to save thousands of dollars per year on premiums for comprehensive coverage.
If the Trump administration’s guidance to extend these plans for up to a year is approved, more clients may be asking whether these are a good fit for them.