Happy New Year! If you own a major medical insurance policy, your premiums will be going up this year. Now that Obamacare is almost completely phased in, do you really need to keep throwing money into that same old expensive health insurance plan?
If Obamacare survives its Supreme Court challenge, most Americans will receive tax credits they can apply toward the purchase of comprehensive major medical insurance in 2014. Insurance companies will not be allowed to deny coverage to anyone. So why not drop your coverage now and just wait until 2014 to buy health insurance?
Many consumers are doing just that, and the major insurance companies have been scrambling for new ideas. One increasingly popular solution is “temporary” or short term medical insurance lasting 6-12 months. Short Term Medical plans cost only a fraction of comprehensive major medical plans but provide virtually the same benefits and coverage during their active periods. Short term plans are generally easier to qualify for than major medical insurance, and you can purchase them for multiple consecutive terms. Healthy individuals paying too much for major medical insurance, as well as unhealthy individuals who can’t afford or qualify for major medical coverage, are deciding that these inexpensive short term plans are the smart plan for now.
Consider, for example, that a Safeguard policy for a single term of either 6 or 12 months will pay up to 2 million dollars in claims, pays 80% of covered expenses (80/20 coinsurance), and comes with a maximum out-of-pocket limit of either $5,000 or $10,000. Deductibles may be set as low as $250 or as high as $10,000. These are major medical caliber benefits, but an individual plan costs as little as $40 per month.
Quotes from one independent national health insurance agency, Health Line One, calculated that a family of three in Texas would pay only $99 per month for a short term plan (Safeguard, 6 month term) that provides the same level of coverage as a permanent insurance plan costing $800 per month. Because short term plans are not guaranteed renewable throughout a client’s entire life, carriers like Safeguard can underwrite their policies at much lower rates compared to permanent plans, and they can accept enrollees who have higher health risks that would normally disqualify them from major medical insurance.
Not every insurance carrier offers STMs, and not all agencies are qualified to sell them. Nevertheless, more Americans are choosing them as a way to cut monthly premiums without reducing benefits. And even if you don’t qualify for an STM, there are monthly indemnity plans like Opticaa that have guaranteed enrollment (guaranteed issue) and guaranteed premiums (prices never increase after enrollment). If you want to learn more, make sure you speak to a licensed agent from a registered agency, and make sure any plan you choose is underwritten by a financial institution with a high rating on AM Best.
No one should be without health coverage. Even in these tough economic times, with the promises of Obamacare seemingly in arms’ reach, being medically uninsured is never a wise financial move. Thankfully, alternatives such as short term medical and monthly indemnity plans can fulfill this need on a temporary basis until prosperity returns.