STM As a Viable Alternative for Obamacare

[Paradigm]

Due to the rising costs of Obamacare when the plan is unsubsidized I no longer believe that ACA compliant plans are a good option unless you have preexisting conditions.

If a person is healthy STM is a better option even during open enrollment as they can enroll in the STM plan for a full year depending on the state

In most cases the person would be better off purchasing a STM plan buying supplements and paying the tax penalty than buying an unsubsidized ACA plan.

While STM doesnt in general cover preventative testing or doctor's visits or drugs for the healthy person these arent really an issue.

All of us used to sell only unwritten plans. We used to serve basically healthy people and pre existing was excluded for the relatively healthy this is the better option,

For the unhealthy and the poor who receive subsidies ACA makes sense but not for the healthy. One size fits all cookie cutter molds haven't been a good idea and are causing 30-40% annual rate increases. If you a poor and the subsidy keeps up fine but if you are making 300% or more of federal poverty level it no longer makes sense.

It is best to segment your client populations into healthy and unhealthy and offer all available choices that will protect the client.

 

[Norwayguy]

What about pre x at contract end.

 

[Paradigm]

Very Simple you then enroll them in Obamacare

 

[somarco]

Very Simple you then enroll them in Obamacare

During the next open enrollment .......

That is a dicey way to go. Glad it is you with the exposure, not me.

 

[Yagents]

What if they make $200,000 a year for a family size of 1 to 4?
What would you advise then?

 

[Paradigm]

Yes and since the contract doesn't expire till the next open enrollment. There's no problem with insurability if for instance they cant qualify for a new short-term plan Think of the short-term plan similar to a bronze plan or what we used to sell the high deductible health plans with an HSA where there was no coverage for anything until deductible is met For high income individual I've always advise the high deductible health plan with an HSA because They can self-insure the deductible and by adding supplements on that pay in the event of accident or critical illness it creates a very good package for the client Keep in mind the only reason that short-term plans were bad bargain originally was because all plans were underwritten in major medical and if someone lost their insurability they could be without eligibility for coverage but with Obamacare and guaranteed issue policies that fear no longer exist We already use the strategy when someone comes to us outside of OEP and does not have an SEP. i'm just redefining it as the primary strategy for certain people during OEP. We've already done the dual option in the senior market already. Medicare advantage if they need a guaranteed issue or a Medicare supp if they're outside they're guaranteed issue period and retain insurability

 

[somarco]

Good luck with that, John.

 

[TN_agent]

I have sold short term, but never as a 12 month (minus 5 days or whatever) policy. Always just as a gap until they could get onto major medical (spousal coverage, medicare, ACA, etc) Now, I always make sure that I have said in writing (in an email) that it is not going to cover anything they have ever been treated for, it isn't for checkups or ongoing treatment, and they will still have to pay the tax penalty. It is more in case of car accidents, falling down the stairs, etc, not to see their primary care doctor for a blood pressure medication refill or to get their knee replacement done.

Even with that, I still had one come back a couple of months ago and act all surprised that they had to pay the tax penalty (I only sold them a plan for 3 months until open enrollment) They elected into COBRA for 6 months before that due to a layoff and failed to realize that that would mean they couldn't get onto an ACA compliant plan outside of open enrollment when they could no longer afford the premiums)

 

[timamr]

If I am not mistaken, STM plans are easily issued BUT at time of a claim they actually THEN go back and underwrite/check medical history. So lets say someone gets a STM and even though they have high blood sugar and was diagnosed with Diabetes 4 years ago but they believe they are "healed" due to diet and exercise, however when they have a claim and have to amputate that leg due to Diabetes, the ins. company will go back and look and then decline that claim.

Is my understanding correct? If so, that is not something I would want, nor sell. I am no expert in STM plans but that is my understanding. Right or wrong?

 

[kgmom219]

If I am not mistaken, STM plans are easily issued BUT at time of a claim they actually THEN go back and underwrite/check medical history. So lets say someone gets a STM and even though they have high blood sugar and was diagnosed with Diabetes 4 years ago but they believe they are "healed" due to diet and exercise, however when they have a claim and have to amputate that leg due to Diabetes, the ins. company will go back and look and then decline that claim.

Is my understanding correct? If so, that is not something I would want, nor sell. I am no expert in STM plans but that is my understanding. Right or wrong?

Hmmm...maybe. I think the more reputable companies aren't that bad. I did have one claim denied in that matter, but we fought it and got it paid quite easily.

In an ACA world, its more important that people understand that its not ACA compliant, preventative isn't covered and they are still going to be paying the tax penalty. (I send people an email and have them respond. I've only had to resend back to the client a couple of times.)

But the OP is way off base. STM is not a long term solution. And selling it as a viable alternative is an E&O claim just waiting to happen.