Short-term medical insurance
Retirees nearing Medicare-eligibility may save significantly by choosing short-term medical coverage. Short-term medical insurance is appropriate for some retirees who are between the ages of 62 and 65 and want an alternative to a high-deductible health plan.
Short-term health insurance coverage is designed to bridge the gap in health care coverage during a period of transition, including the time between retirement and Medicare eligibility for early retirees. Coverage is provided by insurance carriers receiving an “Excellent” rating by AM Best and can be purchased for up to 365 days for up to three years.
Short-term medical plans are customizable, allowing customers to select different levels of benefits to align coverage with a variety of needs and budgets. Just like traditional medical plans, short-term medical plans have a coinsurance and a deductible. They may also have annual and lifetime benefit limits.
Who should be interested?
They can provide coverage for up to 12 months before they need to be renewed. It is major medical insurance. In 27 states, these plans can be purchased for 12 months and renewed twice for a total of 3 years of coverage. This means a 62-year-old retiree could remain covered until Medicare begins. This could save that retiree over $18,000 in a premium versus an ACA plan. January 1 effective date is optimal because if the retiree cannot qualify for a renewal the ACA Open Enrollment period can be used to switch to a Guaranteed Issue ACA plan.
Availability of plans:
Listing of the 27 states: AK, AL, AR, AZ, FL, GA, IA, ID, IL, IN, KS, KY, LA, MD, ME, MI, MN, MO, MS, MT, NC, NE, NH, NV, OH, OK, OR, PA, SC, SD, TN, TX, UT, WI, WV, WY
These plans are generally more affordable and have significantly lower premiums and deductibles than the Affordable Care Act’s (ACA’s) major medical insurance plans. in addition to being less expensive, short-term insurance plans don’t have provider restrictions, so policyholders can use any doctor and hospital.
There are no waiting periods, and some plans offer $25,000 of coverage for preexisting conditions.
While these plans don’t meet the minimum essential benefits of the ACA (no preventative care coverage, no unlimited lifetime maximum, etc.), short-term medical plans are considered creditable coverage under the Health Insurance Portability and Accountability Act
Popular Plans & Examples:
Sample plan for a 60 yr old Male in Utah
Low Plan Example
Monthly premium of $125
Deductible of $5k
Coinsurance is 50%
Maximum out of pocket amount is $10k
High Plan Example
Monthly premium is $502
Deductible is $2,500
Plan pays 70%
Maximum out of pocket amount is $6k
DISCLAIMER: This information is not a complete description of benefits. Contact the plan for more information. Available issuing companies will vary by state.
