Long-Term Effects of Taking Away Short-Term Health Care Offerings

Are you between jobs and lacking a steady income, but still want to have health care insurance to cover unforeseen accidents or illnesses? Need a more affordable option and have no real pre-existing health issues?

A short-term medical care plan might be the best solution for you.

 Short-term medical plans are a cost-efficient option that fills an important need. By design, these policies do not cover pre-existing conditions, which is one of the major reasons they are significantly less expensive than standard medical plans. They truly serve as ‘insurance’ as opposed to typical pre-paid health care plans.

Unfortunately, due to the Affordable Care Act, unemployed individuals might be unable to qualify for subsidies, which are now granted based off of income that has already been earned during the year.

This new rule will leave many unemployed individuals unable to obtain health care coverage whatsoever. The ACA has doubled insurance costs, so someone already dealing with a shortage of cash will simply have to go without. In the case of an emergency, their only option will be an expensive trip to the ER, followed by the possibility of personal bankruptcy.

WHAT DOES THIS MEAN FOR MANAGED CARE EXECUTIVES?

• Blame – Health insurers are almost always the first ones blamed when people do not have health coverage.  While, in actuality, insurers are attempting to provide consumers with an affordable option to meet a temporary need, they are most likely to be held at fault when someone suffers from an unforeseen health need and is left in financial ruins during a time of unemployment.

• Cost shifting –By offering these policies, a mechanism exists to create an insurance fund for claims that occur during these temporary needs.  By no longer being able to insure these losses, combined with the fact a consumer will be unable to pay the medical bills, unpaid claims will be shifted to others – causing health care premiums in the traditional market to rise.

• Inappropriate use of Emergency Room – When a person has no insurance, the emergency room is the only place care can be received.  While a condition may not be an ‘emergency room’ need, it may require immediate attention.  These types of ailments (i.e. an ear injection or easily curable UTI) will be treated at a cost nearly 10 times the rate it could otherwise be treated.

• Consumer dissatisfaction – How many times have you heard of people waiting hours in the emergency room? When you use an emergency room for a non-emergency need you are placed at the back of the line.  Consumers frequently blame providers for lengthy waits and over-crowded waiting rooms.

Overall, short-term insurance policies allow consumers who find themselves between jobs or down on their luck to protect themselves. Stripping away the right to choose these alternative policies puts the consumer at a direct disadvantage and also, incorrectly places the blame onto the shoulders of the insurance provider. Perhaps it is time to take a step back and look at who the new ACA regulations are hurting in the long-term.

These comments were also included in Managed Healthcare Executive’s recent article, “HHS proposes clampdown on short-term health coverage.”