Wall Street Journal Looks at Short-Term Health Insurance Plans
The Wall Street Journal today examines short-term health insurance plans, which offer minimal benefits for a low cost to healthy people who have a temporary need for coverage, such as workers who have been laid off or are between jobs. Such policies, which are limited by federal law to 12 consecutive months of coverage, operate like traditional indemnity health plans and usually cover physician services, hospital stays and prescription drug costs but not preventive care, dental care, eye care or immunizations. Short-term plans also do not cover preexisting conditions or chronic health problems developed while enrolled in the plan. Deductibles range from $250 to $2,500, and members typically pay 20% of the next $5,000 of covered health expenses. The Journal reports that the policies offer a less expensive alternative to COBRA -- the 1986 Consolidated Omnibus Budget Reconciliation Act, which allows unemployed workers to keep employer-sponsored health coverage by paying 102% of the premiums. COBRA can be "expensive and impractical for healthy workers" who do not have many medical claims, the Journal reports, pointing out that while COBRA premiums averaged about $400 a month in 2000, a 27-year-old woman living in California could get a short-term insurance policy with a $500 deductible for about $103 a month. Short-term insurance plans are banned in several states, including Massachusetts and Vermont, but, under pressure from short-term insurance companies, legislators are considering allowing the policies, the Journal reports. Traditional health plans are "some of the biggest opponents" to short-term coverage because of fears that such plans will take away healthy workers and leave long-term plans with only higher-risk members (Chaker, Wall Street Journal, 5/7).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.