Make sure your Facts are straight #ACA

To continue Friday Facts we will talk about the "other" insurance plans. These are options to ACA qualified Major Medical plans and will be growing in popularity now that the individual tax penalty for not having insurance has been reduced to $0. I'm going to discuss MEC, Indemnity, Short Term Medical and Healthshare.

MEC (minimum essential coverage) is my least favorite so I will do it first. This is also called a "Skinny Plan" and covers preventive services and not much else. It is frequently paired with an Indemnity plan to help fill in some of the holes left behind. MEC plans usually cost less than $100/person/month and are very popular with companies that have a large number of low wage employees. They meet the ACA requirement for an employer to offer coverage (I don't see how!) and people often don't realize how little the cover. When paired with an Indemnity plan they can be a lot better but many employers require the employee pay for the indemnity part which employees often choose not to do. It USED to be that these were only available through an employer. Recently they have become an option for individuals which is what most of those robocalls you get are offering.

I mentioned Indemnity plans above so lets go over those now. An indemnity plan pays a fixed amount when something happens (eg. $1000/day when you are in the hospital). Many of these plans have little to no coverage for day to day things but can be very helpful when the bad thing happens. Some people choose to have an indemnity plan as a supplemental policy to a Major Medical plan to help cover deductibles and such. If your indemnity plan does not have a network attached to help reduce the bills I would only recommend it as a supplement (although it's better than nothing). An indemnity plan with a network can be a solid insurance option - just be aware of the holes. These programs won't cover pre-existing conditions for at least a year, have underwriting and pay the same amount no matter what your bill is. On the plus side, they cost less, don't tend to increase over time and can stay in place forever EVEN when you have other insurance.

A Short Term Medical plan (STM) is designed to cover you for 30 - 364 days. They are often used by people who are between employer plans. The administration recently changed the potential length of a STM to the 364 days from 90 days which will make it a great option for a lot of people now that the penalty is $0. These plans cover much like insurance did before the ACA - no pre-existing conditions, limits on some items (like ambulance and organ transplant), higher deductibles and max oop available for consumers, limited or no PCP visits with a co-pay and capped payouts for insurers. These limits allow the prices to be lower than an ACA plan and some programs even allow you to pay a lump sum that saves you even more. They usually have broader, nationwide networks which is nice. Just be aware of when your plan ends. If you have a cancer diagnosis and your STM ends they are probably not going to issue you a new one. Loss of a STM plan is NOT a special enrollment period for the ACA so you could end up without coverage for months.

Healthshare programs are faith based plans that are NOT insurance but work much like it. They have become increasingly popular as the costs of Major Medical have been rising. Healthshare programs usually have a broad network (most common is Multiplan/PHCS) and somewhat limited coverage - much like an STM. They are more likely to help with preventive care and at least a few PCP visits. Some things like maternity or cancer may require that you be in the program for several months before you are covered. Pre-existing can take 2 years to be covered. Prices are usually much lower and you don't have to enroll at any special time of year. Some of these programs have strict faith rules you must follow and I've only found 1 plan that covers same-sex couples. For people with little to no pre-existing issues these are a nice alternative to consider.

The most important thing with these programs or ANY insurance product is that you understand what you have and where the holes are. Keep your facts straight and you'll be happier with your coverage! Got questions about these programs or any other health insurance issue? I'm here to give you "Just the Facts" - Let's talk!!