Beware the Bait-and-Switch of Short-Term Insurance Plans
By Jennifer Perkins

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Short-term insurance plans were originally intended to be a stopgap solution for people between jobs or who needed temporary coverage for other reasons. But that is changing, and that could be a problem for you or your patients. 

Initially, short-term plans were just that: short-term, or limited to 90 days of coverage. Short-term plans have evolved to provide 364 days of coverage. And short-term plans cost much less than Affordable Care Act (ACA) plans. 

If that all seems too good to be true, that’s because it is. 

Short-term plans essentially provide only catastrophic coverage. They do not cover pre-existing conditions, and they do not cover preventive care. ACA premium subsidies are not available for short-term plans. Yet people still buy the plans. 

For Texas at least, a new state law seeks to prevent the shock and awe that happens when patients attempt to access care covered by short-term plans. 

Senate Bill 1852 by Sen. Angela Paxton (R-McKinney) mandates that short-term plans inform enrollees about the limitations and possible exclusions of short-term coverage, including:No prescription drug coverage;

  • No mental health services;
  • No substance abuse treatment;
  • No maternity care;
  • No hospitalization;
  • No surgery;
  • No emergency health care; and
  • No preventive health care. 

Gov. Greg Abbott signed the bill into law last week. It will take effect Sept. 1. 

SB 1852 requires patients to sign a disclosure form acknowledging what short-term plans do and don’t cover. Expiration of the short-term plan may occur outside of the ACA open-enrollment period, meaning that if patients want to switch to an ACA plan for its more comprehensive coverage, they may not be able to immediately enroll in that plan. 

This can be a sticky wicket for physicians when they must be the bearer of bad news: the short-term plan doesn’t cover the patient’s visit. And since more and more patients are selecting short-term plans instead of full coverage, the Texas Medical Association encourages physicians to verify eligibility before providing services.

Last Updated On

June 17, 2019

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Jennifer Perkins

Advocacy Communication Manager

(512) 370-1469
Jennifer Perkins

Jennifer Perkins, a native Texan and University of Texas Longhorn, has worked in politics, public affairs, and advocacy for more than two decades, covering a litany of subject areas and a number of states, using a marketing-oriented communications style as informed by her MBA. Jennifer has two dogs, is a college football fanatic, loves to entertain, and prefers to be outdoors..

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