Short-term coverage can benefit consumers who missed ACA deadline

Many insurers are highlighting plans with short-term coverage now that the enrollment period for health insurance exchanges is mostly complete. They say these so-called Band-Aid policies are better than having no coverage, despite coming with a long list of limitations.

Short-term policies usually offer only bare minimum benefits, and don't often cover routine physicals or conditions that have been diagnosed or treated up to five years prior, reported the San Jose Mercury News.

"These are not major medical health insurance plans, but it does give you some level of coverage if you have no other options," Brian Mast, vice president of communications for the online insurance marketplace eHealth, told the newspaper.

Because of a loophole in the Affordable Care Act, these inexpensive, minimal coverage plans can still be offered in the employer market as long as companies still provide at least one plan that's compliant with the reform law, FierceHealthPayer previously reported.

However, purchasing short-term plans won't prevent consumers from being penalized under the ACA--such policies don't comply with the healthcare reform law. Although insurers selling short-term plans must notify consumers that they don't provide essential health benefits as required under ACA, some industry analysts fear consumers won't realize they're buying limited coverage, the Mercury News noted.

For example, out of 261 consumers with short-term coverage, 20 percent said their policy complied with ACA coverage requirements and 64 percent said they didn't know, a March eHealth survey showed. But 79 percent of consumers said they like the affordability of short-term plans, 35 percent said they liked how simple it is to cancel coverage and 29 percent said short-term plans cover the medical services they value most.

"It's fail-safe coverage for some injury or illness of a serious nature that occurs during [a short] period," Patrick Johnston, president and CEO of the California Association of Health Plans, told the Mercury News.

To learn more:
- read the San Jose Mercury News article