The year of the Short Term Health Plan

In most cases throughout my career as an insurance broker I have been opposed to short term health plans.  I was opposed to them because if you got sick you could not renew them and you could put yourself in a bad situation.  The only time I really ever used them is when someone had gotten a new job and there was a 90 day waiting period for insurance.  This made sense because you could not get cancelled during the 90 days, and you had insurance behind it with your job 90 days later.  I would also use them when my clients hit age 64.  These were good for the same reason. They would hit Medicare in 12 months or less.  Same rationale, if during the 12 months of short term they became ill or uninsurable, Medicare was there to guarantee us coverage.

Well 2013 will present us with a similar opportunity.  The new Health Care Law, AKA Obamacare goes into full force on January 1 2014.  This will create a guarantee issue situation for everyone with or without insurance and with or without medical conditions.

I ran some plans in the Chicago suburbs look at the pricing differences, I used a family of four as the model the two adults at age 45 and the two children at age 10.  The Short term plan I ran for 12 months with a $2500 deductible and $5000 out of pocket maximum was priced at $500 per month.  All you are giving up on this plan versus the major medical is some of the preventative services and it covered THREE doctor visits per year.

Here are the results of the major medical plans All with a $2500 deductible some had a higher out of pocket maximum all do cover preventative care without a co-pay.

Humana- $733 per month

Independence Holding Group (IHC)- $718 per month

United Health Care- $674 per month

Aetna- $817 per month

Blue Cross Blue Shield of Illinois- $686 per month.

So you trade some preventative care to save a minimum of $186 per month.  Now this might not be the right strategy for everyone, but it is a consideration.

Welcome to 2013!!

Eric Wilson