CMS: STM Limited to 3 Months - No Renewal Allowed

[Ann H]

They have some pushback. Here is an article from yesterday, about Republican-led states feeling that it limits competition and choice and is designed to keep ACA risk pool floating. Of course, it is designed for that, which the Administration admitted to.

Republican-led states are pushing back on a federal proposal to limit the use of short-term health plans. The Obama administration aims to move more healthy people into the Affordable Care Act marketplace by limiting cheaper but less-robust coverage options.​

http://www.modernhealthcare.com/article/20160809/NEWS/160809905

And NAHU has lobbied against it and against the proposed restrictions in Expatriate Coverage, Escepted Benefits, and Specified Disease coverage.

 

[Evan]

Anything new on this?

 

[G.Gordon]

What I'm getting is that it is too late for anything to change for the 2017 plan year, so this might be reality for 2018, but nothing to worry about this season. I hope that is true because with another 25-30% on my grandfathered plan going ST might be my option as well.

 

[Evan]

Some good news then.. thanks

 

[Yagents]

Health Insurers Want to Restrict Plans That Don

some comments from the authorities

 

[bluemarlin08]

Curious if there is any more info on this matter. UHC doesn't think anything will change nor does National General. I've talked with many clients about this in relation to the new rate increases, they want options.

 

[Yagents]

Couldn't have said it better Marlin.

This govt best not take away the only option left for many.

 

[bluemarlin08]

Couldn't have said it better Marlin.

This govt best not take away the only option left for many.

Have a mom and dad with 2 kids, current 6000 Hdhp with bcbs, premium increasing to 1621 per month. Compared to a 11 month or 360 day benefit period, 2600 deductible and 2600 max out of pocket premium 408, why wouldn't they look hard at this option.

 

[yorkriver1]

Penalty. Exclusions: Pre-existing condition exclusions, maternity, substance abuse treatment, probably no preventive care covered with $0 deductible, possibly other exclusions, if carefully checked out it could work, and we have no crystal ball. If the limitations don't seem like an issue, it's a risk they may want to take. Guaranteed "loss" of the ACA plan premium if they have little or no expenses. This is why people bought high deductible plans before ACA.

 

[Ann H]

Penalty. Exclusions: Pre-existing condition exclusions, maternity, substance abuse treatment, probably no preventive care covered with $0 deductible, possibly other exclusions, if carefully checked out it could work, and we have no crystal ball. If the limitations don't seem like an issue, it's a risk they may want to take. Guaranteed "loss" of the ACA plan premium if they have little or no expenses. This is why people bought high deductible plans before ACA.

Those are very good reasons not to buy it. You could list them as:
* Pre-Existing Conditions Exclusions - a huge issue
* No Normal Maternity coverage, but complications are covered - a very large issue
* No substance abuse treatment - not that important for a lot of folks
* No Preventive Care at 100% - not a big deal, considering the premium difference.
* Possibly other exclusions - could be a big deal
* Penalty - a big deal only if the person is not exempt, or if the premium + penalty approaches the cost of an ACA plan.

The Pre-Ex condition exclusion is a huge deal. Embedded in that issue are sub-issues, like:
* Underwriting at claim time - Most of the policies underwrite and seek medical records when a claim is issued
* Pre-ex definition - They can construe pre-ex to mean anything even remotely related to a prior condition. For instance, if you have HBP, then a stroke is pre-ex. If you had a complicated pregnancy before, a new pregnancy's complications might be construed as pre-ex. If the child had an ear infections, anything to do with that ear might be pre-ex. Of course, this depends on the policy, the pre-ex definition, and the carrier's reputation.

Now for the positive issues:
* Cost difference! - Huge issue. In Bluemarlin08's case, the ACA premium costs $1200 more monthly ($14,400) more annually, and the deductible is $3400 less. You can pay for a lot of your own maternity expenses, substance abuse, and certain Preventive Care with that kind of savings.
* More deductible & OOP choices - Could be a big issue, or a minor one. You are not limited to metal-tier, nor deductibles/OOP of $7,130 or less, which can be important for people wanting catastrophic coverage.
* PPO networks - A big issue
* Might be exempt from the penalty, or the premium difference might be worth it. - A big issue

So, it comes down to this:
1. Does it cost less? (Must include the penalty if not exempt)
2. Is the savings worth the extra benefits (lower deductible, PPO, etc.)?
3. Is the savings worth the extra benefits, plus the extra risk?
4. Do you have ANY pre-ex conditions?

As for the penalty, in BlueMarlin08's case, the household income would have to be $576,000 before they hit a penalty of $14,400. Even then, they might already hit the penalty cap of "the premium for the Lowest Cost MEC plan available to this family". For an average non-subsidized family, making, let's say $120,000, they will probably fit the unaffordable exemption in BlueMarlin's case. For a family making $250,000, the penalty would be $6250. That means their net savings would be $8,150 to take an STM and pay the penalty.

I can see lots of reasons why STM would be the choice of many folks. It's a better choice than uninsured, that's for sure. For an agent, the biggest issues are whether or not they have any pre-ex, and whether or not they fully understand what they are doing and the risks they are taking, and whether or not the client is the one that made this decision.