Everyone wants to ensure they have health coverage when they visit the doctor or face a medical emergency. As an insurance shopper, you seek options that provide coverage to meet your needs. You also want insurance that’s affordable. Finding yourself without coverage, like when you are waiting on an employer’s sponsored plan, can be nerve-racking. What should you do for your health insurance needs? Can you apply for Obamacare? Or should you apply for a short-term health insurance policy? Here we will answer these questions and show you what to do when you need health insurance In Texas.
What is Short-Term Health Insurance?
Short-term health insurance is designed to be a temporary solution for those who need health care benefits but are currently unable to obtain health insurance. The reasons can vary from being outside of Open Enrollment for Obamacare, waiting on a probationary period from a current job, or waiting for eligibility for Medicare.
Policies are sold in 364-day terms. The insurance company your policy is under has the option to renew for up to an additional 24 months. Once you have reached the end of your third term, you will need to reapply. However, short-term health insurance is not guaranteed renewable. This means if you either have a preexisting condition or have been diagnosed with one during the term in which you were currently enrolled, you may not be able to secure another STH insurance policy.
What is Obamacare?
Obamacare is health insurance through the Marketplace. This insurance is obtained by visiting the website and applying for coverage. A Marketplace plan is more permanent in that there are no terms and will not expire after a period of time. You do need to address your insurance each year during the Open Enrollment period. You can continue with your plan, this would mean there were no changes to your income, relationship status, or home status, or make the necessary changes. You can also apply for an Affordable Care Act policy and make your changes through the Marketplace Call Center, a certified enrollment partner, or a mail-in paper application. Just keep in mind your deadlines.
Are There Differences Between Short-Term Health Care and Obamacare?
Both Obamacare and short-term health insurance in Texas have their benefits and their limitations.
Obamacare, or health insurance coverage under the Affordable Care Act, provides healthcare for all ages; there are few limitations on coverage. It is available to almost all who apply. To be eligible, one must:
- Live in the U.S.,
- be a U.S. citizen, and
- not be incarcerated.
You must also not be receiving Medicare. Medicare is its own insurance, and it is not lawful to carry Medicare and a Marketplace insurance policy concurrently.
Obamacare also provides tax credits to those who fall within certain income parameters. If you fall within 100% and 400% of the federal poverty line, you can qualify for tax savings on your policy. When you apply for coverage, you can apply your tax saving to your insurance premiums.
NOTE: The premium tax credit is a sliding scale. If your situation changes, job or home, your credit changes. It is important to keep your tax information up to date so you will not have to pay at the end of the year.
Obamacare has a disadvantage.
- Limited Open Enrollment period. If you need insurance immediately, you’re out of luck. You need to wait for the annual OE period, which is November 1 – December 31 of each year. There is, however, a Special Enrollment Period for those that qualify.You will need to have a life event like having a baby, getting married, or losing your qualified health coverage to apply.
Short-term Health Insurance
Short-term health insurance in Texas provides coverage for those who need it right away. It is not bound by ACA regulations that require an Open Enrollment period. This is one of its advantages. Another is cost. They are one of the more affordable forms of insurance. However, it is a trade-off. With the lower cost come policy limitations. You lose many of the standard coverages you would normally receive with a traditional health insurance policy.
Short-term health insurance coverage limits.
- Policy duration – As we spoke of, policies are for one year, with the company retaining the option to renew for two years. This is insurance company specific, and not all health insurance companies offer this option. They are also not guaranteed renewable. This means that once your policy ends, while you have the option to reapply, they are under no obligation to approve your new application.
- Preexisting conditions – Short-term policies are medically underwritten. You will be asked about your medical history for the past 2-5 years. Through this history, one can be charged higher premiums or even declined coverage. And if you develop a condition during a policy term, the following policy term you can be denied coverage or charged a higher premium.
- Coverage limitations – In addition to medical underwriting for preexisting conditions, there are benefits that STH insurance does not cover. Maternity, Dental and Vision, and Preventive Care benefits are not covered. They will also have annual and lifetime limits on coverage.
- Availability – A major disadvantage to short-term health insurance in Texas is its availability. While you will find a strong presence for Obamacare, when you shop STH insurance, you will only find nine health insurance companies that sell policies.
Is Short-Term Health Insurance Better than Obamacare?
While there are significant differences between the two insurance options, and it seems that an Obamacare policy would be the better option, there are times when a short-term policy can be more beneficial than Obamacare. The choice will always be dependent on your personal situation.
Here are a few situations when short-term insurance in Texas will be the better option.
- The Marketplace’s Open Enrollment period is near, but you don’t want to wait for medical insurance coverage. Short-term health insurance can benefit those who want a temporary form of healthcare so they can see the doctor for routine health care or emergency services.
- You are within the ‘new hire’ period at your job. Some employers require new hires to work a probationary period before any benefits are given. Short-term health insurance helps bridge the gap between their hire date and the day their employer stipulates benefits can begin.
- If you are waiting for your Medicare benefits to begin. If you are a few months away from receiving Medicare benefits, it may seem pointless to purchase an ACA insurance policy. A short-term health insurance policy may be more along the lines of what you need to get you to Medicare. Just understand that not all companies offer this option if you are over 64 years old.
- Those financially in between Medicaid and ACA insurance. Sometimes short-term insurance may be your only option. Some can find themselves in the position of not qualifying for Texas Medicaid, and the Marketplace insurance is too expensive. The danger, then, is that once you are diagnosed with a condition and try to apply for your next renewal, chances are you will be denied coverage.
All in all, each insurance option has its place. It breaks down to the insured’s personal situation and their purpose for purchasing the insurance policy. The more benefits you require, the better off you will be in purchasing an Obamacare policy. If you require temporary insurance, or even if you are healthy and just need an insurance card to provide you benefits to see a doctor if you get a cough, short-term insurance can be the better option for you to consider.
It is important to understand that short-term health coverage is not a permanent solution for your health insurance needs. It was designed to help people with their medical insurance on a temporary basis. There is a reason it is limited in coverage and inexpensive. When you have questions about your insurance needs, it helps when you have experts on your side. Cover Mile desires to help you find the best insurance to fit your situation. From Short Term Health Insurance to ACA Marketplace plans, we can guide you in providing your family with the protection you need. Contact us today.