Short-Term Plan Sign-Ups See Significant Gains in 2014, Despite ACA
The number of U.S. residents who applied for short-term health plans increased by more than 100% in 2014, despite the Affordable Care Act's coverage expansions, Reuters reports (Pinsker, Reuters, 6/3).
Short-term policies focus on catastrophic care and often are selected by individuals in between jobs, as well as those who missed the deadline to sign up for other coverage during the ACA's open enrollment periods (Appleby, Kaiser Health News, 6/3). Such plans do not meet the ACA's minimum coverage requirements. For example, they lack preventive care and maternity coverage. In addition, they are associated with higher deductibles and out-of-pocket costs. Because such plans are non-compliant with the ACA, individuals with such coverage are subject to the individual mandate's penalty (Reuters, 6/3).
Short-Term Plans Maintain Popularity
According to KHN, observers expected enrollment in short-term policies to fall under the ACA, but the opposite appears to be occurring.
For example, online insurance broker eHealth reported a 130% increase in applications for short-term policies last year (Kaiser Health News, 6/3). Sign-ups among such plans increased from 60,000 in 2013 to about 140,000 in 2014, according to the company.
Meanwhile, Agile Health Insurance -- a subsidiary of Health Insurance Innovations -- said short-term plan sign-ups increased by 100% last year and continue to increase so far in 2015.
According to Reuters, some of the increase in enrollment can be attributed to:
- Individuals seeking to fill coverage gaps after missing the opportunity to sign up for ACA-compliant coverage until the next enrollment period; and
- Retirees seeking low-cost coverage until they become eligible for Medicare.
However, the largest share of short-term policies is held by young, healthy individuals who want low-cost catastrophic coverage, Reuters reports. For example, 57% of eHealth's customers are between ages 18 and 34 (Reuters, 6/3).
According to eHealth, premiums for short-term policies average about $110 monthly for an individual, with an annual deductible of $3,589. Costs are lower among young individuals, at about $89 per month for those between ages 25 and 34, KHN reports.
According to KHN, premiums for ACA-compliant coverage often are higher (Kaiser Health News, 6/3).
More Patients Turn to Clinics
In related news, some community health clinics are seeing more patients after implementation of the ACA, contrary to expectations, WFAE/Kaiser Health News reports.
According to WFAE/KHN, the increase is in part the result of a coverage gap in non-expansion states where individuals have incomes that are too high to qualify for Medicaid but too low to receive subsidies to help them purchase coverage through the exchanges.
Ben Money, president of the association that represents North Carolina's community health centers, said "Over half of the people that we see would've been eligible for Medicaid expansion had the state elected to exercise that option."
Meanwhile, some individuals who do qualify for subsidies say they still cannot afford coverage (Tomsic, WFAE/Kaiser Health News, 6/3).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.