First, I went to the Kaiser Family Foundation’s Health-Insurance Marketplace Calculator to find out what Obamacare plans I’d be eligible for. (After November 1, when open enrollment starts, if I was doing this for real I’d go to Healthcare.gov.)
I entered my real zip code, but I input an older age—51—in order to better replicate the experience of a truly pinched Obamacare customer. (On Obamacare, higher rates are determined by age, not health status.) According to the tool, a middle-grade Silver plan would cost me $450 each month in premiums.
That’s a lot. In fact, the sticker shock helps explain why brokers began issuing more short-term health plans after the Affordable Care Act was enacted: People were looking for a cheaper alternative to Obamacare plans.
But I have to remember that I get the upsides of the Affordable Care Act under this plan, too. The insurance company has to cover whatever health conditions I have right now, it can’t charge me more if I get sicker, and it has to cover a list of “essential health benefits,” like pregnancy, mental-health care, and prescription drugs.
Then I went to agilehealthinsurance.com, which sells short-term health plans. The good news: The plans are much cheaper. Most had premiums of less than $100. The deductibles were high—mostly $2,500 or $5,000—but that’s comparable to what you’d see on some Obamacare plans.
The pain started when I clicked “select this plan” and saw some of the short-term plan’s terms and conditions. Under “GENERAL DISCLAIMERS,” the site tells me the plan doesn’t cover preexisting conditions. The plan’s “limitations and exclusions” page lets me know this means:
- Charges resulting directly or indirectly from a condition for which a Covered Person received medical treatment, diagnosis, care, or advice within the 60-month period immediately preceding such person’s Certificate Effective Date are excluded for the first 12 months of coverage hereunder.
- Preexisting conditions includes conditions that produced any symptoms which would have caused a reasonable prudent person to seek diagnosis, care, or treatment within the 60-month period immediately prior to the Covered Person’s Certificate-Effective Date of coverage under the Policy.
That means if I’ve gotten treatment for a medical issue in the past five years, it won’t be covered by this plan.
If I get cancer, I have to wait 30 days before my treatment is covered. I can’t get counseling, mental-health care, or treatment for substance-abuse issues, and the plan doesn’t cover prescription drugs. And you can forget about obesity treatments, LASIK, sex-change operations, childbirth or abortion, dentistry, or eyeglasses. If I get injured while participating in college sports or the rodeo, I’m on my own. As a Texan, this is worth taking into account.
Dania Palanker, a professor at the Center on Health-Insurance Reforms at Georgetown University’s Health-Policy Institute, examined a bunch of short-term plans and found that these types of restrictions were not unusual. One plan she saw would cover joint pain from an accident, but not arthritis. She also worries that people might not realize that these plans set limits on how much they will pay for various procedures, and the limits are often lower than the actual cost. “$1,250 on an intensive-care unit, and $2,500 on a surgeon and anesthesiologist per surgery ... I know that’s not enough,” she told me. “People who enroll in that plan and get surgery are not going to have the coverage they need, and are going to have tens of thousands of dollars in bills.”