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Expanded Short Term Health  -  best alternative to Obamacare

Best Alternative to Obamacare - 364 Day Short Term

best alternative to obamacare plans

 

We get the question almost daily...

 

What is the best alternative to Obamacare plans?

 

It almost always comes down to cost.

 

People who are usually priced out of the Obamacare market (with no tax subsidy) or people who just want major medical (catastrophic) coverage.

 

After 2014, we really lost any alternative options.

 

The ACA or Obamacare market was THE market.

 

Carriers pulled out of other types of plans.

 

Basically, all other health plans were forced off the market.

 

The penalty was the big driver of that.

 

Over time, health sharing plans started to explode on the scene (around 2017 in earnest).

 

We then got the expansion of short term health plans to 364 days and 3 year renewals.

 

We now have two options!

 

Let's look at these two alternatives and make sure to understand the difference between Obamacare plan

 

You can quote short term health plans here:

 

How to quote Trump short term health plans

 

Health sharing plans and rates are available here.

 

You can also jump to a section here:

 

 

Let's get started.


Quick intro to Obamacare plans

 

Before we look at the alternatives, let's first consider what we're trying to leave.

 

Obamacare or ACA (Affordable Care Act)

 

The Obamacare law brought about transformative changes to the health insurance market.

 

The big changes took place in 2014.

 

Among others here are the key changes:

 

  • Mandated coverage of 10 essential health benefits
  • People cannot be declined based on health
  • No waiting period for pre-existing conditions
  • No life time max
  • Maternity coverage is mandated
  • Mental health coverage is mandated
  • Tax credits based on income
  • Expansion of Medicaid/Medi-cal
  • Penalties for not having health insurance

 

 

With these key changes, one big effect came about...

 

Monthly premium roughly doubled or tripled if you don't qualify for a tax credit.


The law did great things for certain people:

 

  • Who qualify for a tax credit
  • Who have health issues and healthcare costs

 

If you don't get a tax credit, it can be very expensive.

 

The penalty was the "stick" to make sure healthy people signed up for the plans.

 

They didn't want to pay the penalty!

 

Things are changing in 2019!

 

Let's look at the new short term health plans as an alternative to Obamacare.

 


New short term expanded plans as alternative

 

Before 2015, we had 360 days short term health plans.

 

People would use this as a way around Obamacare.

 

Just sign up every year assuming we're in good health.

 

They would have a penalty but it might be much less than the premium difference between short term and Obamacare.

 

Obama's people saw this and restricted short term to 90 days max duration.


This basically made that alternative very inconvenient if not risky.

 

The goal was to force everyone on to the Obamacare plans.

 

Then came Trump with his reversal:



3 changes to short term health plans

 

 

In 2018, Trump expanded short term health in two ways:

 

  • Expansion to 364 days
  • Renewal up to 3 years

 

This made short term health plans an alternative again.

 

There are major differences between short term and Obamcare which you can read here.

 

A quick synopsis...

 

 

The penalty is slated to go away in 2019 just in time for these new short term plans.

 

What about health sharing as an alternative?

 


Health sharing plans as alternative

 

Health sharing is a different deal altogether.

 

Health sharing is NOT insurance.


It works like a membership where members share health care costs with each other.

 

In some ways, this is how health insurance works but there are big differences.

 

You can learn more about the differences between health sharing and Obamacare here.

 

Health sharing has some of the same limitations as short term but there are big differences there.

 

Now that the penalty question will be the same for either, it's important to compare the two alternatives!

 


Difference between Short term health plans and health sharing as alternatives

 

First, both are designed to cover more catastrophic coverage.


They have similar limitations:

 

  • Mental health benefits not covered
  • Pre-existing conditions not covered or subject to waiting period
  • Maternity not covered or subject to waiting period
  • Out-patient medications not covered
  • Caps on max benefits (generally $1 to $2M)

 

They also have some shared benefits:

 

  • Can enroll any time of the year
  • Lower priced monthly costs if not tax credit eligible
  • Protection for bigger bills

 

Where are they different?

 

A few big differences that are important.

 

Keep in mind that health sharing plans were primarily a reaction to the short term plan alternative being pulled from the market in 2015.

 

We saw the health sharing plans take off shortly after.

 

Apples and apples, we prefer extended short term health plans for these reasons:

 

  • Short term plans are real insurance
  • Short term plans have DOI oversight and reserve requirements
  • Short term doesn't have waiting periods of new issues

 

The reason many people flocked to health sharing had to with the 90 day restriction on short term plans.

 

And...

 

The Tax Penalty!

 

Health sharing plans did not have the tax penalty.

Short term plans still did.

 

That penalty goes away in 2019.

 

That makes short term much more attractive IF your State goes with the expansion.

 

Not every State will allow the expansion...largely along political lines.

 

California has already banned them.

 

That means health sharing will continue to be strong there in 2019 and beyond.

 

You can quote the short term health plan alternative here:



How to quote Trump short term health plans

 

You can quote the Health sharing alternative here.

 

We're happy to help you compare the two options.

 

There's no cost for our assistance at 800-320-6269 or by email.

 


Which alternative to Obamacare is better?

 

First, let's clarify.

 

If your State allows the expansion of short term health plans (364 days and 3 year renewal)...

 

That would be our choice.

 

We only deal with AlieraCare for the health sharing option because they attempt to mimic much of the protection that health plans have.

 


They set aside a reserve in case of a bad run.

 

Ultimately though, health sharing plans don't have the protection of the Department of Insurance.

 

The DOI has protections built in to pay claims in case the carrier runs into financial trouble.

 

Health sharing plans do not have this!

Short term health plans will have this DOI oversight and protection.

 

Since the rates are probably pretty comparable (about 1/2 of the the unsubsidized Bronze plan), we would take the short term plans.

 

The bigger issue is this...

 

There are waiting periods built in to the health share plan ever for certain categories of new health care issues.

 

Cancer. Surgery. They can be 9 months and up.

 

That makes us nervous.

 

Again, this assumes it's not a pre-existing condition.


Something unknown to you.

 

Short term doesn't have restriction.

 

One note...if you can't qualify for short term based on health (there's a simple questionnaire), you may have to enroll in AleiraCare with the waiting periods.

 

If you have more serious health issues, the Obamacare plans are going to be the better fit anyway.


If anything, you may get an alternative until you CAN get Obamacare:

 

  • Open enrollment
  • Special Enrollment event (loss of coverage, marriage, birth, move are big 4)

 

Also, you have to see what's available in your State:

short term health plans by State

 

 

What about the penalty?

That was a big reason people picked one alternative over another.

 


Is there a penalty with Obamacare alternatives

 

This WAS a big difference between the two Obamacare alternatives.

 

Through 2018:

 

  • Short term plans have a penalty beyond 3 months in a year
  • Health Sharing plans allow an exemption to the tax penalty

 

2019 Short term Plans:

 

  • No tax penalty for either Obamacare alternative.

 


Remember that the initial penalty was for not having ACA compatible coverage.

 

This was to drive healthy people to the new marketplace in order to keep costs from exploding.

 

We're stuck in a period where the rates DID go up.

 

Healthy people are either leaving or choosing not to enroll.

 

Health Sharing and the expanded Short term alternatives will quicken this spiral.

 

In fairness, it was going to come anyway.

 

We wrote about it back in 2011!

 

There was nothing in the law to address the core driver of health insurance inflation.

 

Health care utilization (how much is used) and cost.

 

In fact, there's a big chunk of the law that accelerates that with mandated richer benefits for certain plans.

 

We would have rather been wrong!

 

So...starting in 2019, no penalty for either alternative to Obamcare.


How to compare alternatives to Obamacare

 

First, run the quote here for both options:

Short term health quote
AlieraCare health sharing plan quote

 

This gives us a sense of the costs.

 

Take a look and see if the 364 day short term expansion is available in your State.

 

You'll see it right in the short term quote above.

 

If so, we would go with short term plans if the rates are equivalent.

 

It has the following benefits:

 

  • DOI protection and oversight
  • Requirement to pay claims per insurance contract
  • No waiting period for newer issues that are covered



Both alternatives have large doctor networks so that's not generally an issue.

 

Again, there's ZERO cost for our help.


Call 800-320-6269 or email us with any questions.

 


Review for Obamacare Alternatives

 

It can be confusing.


The health care market is changing so quickly and that's only going to continue unfortunately.

 

Millions of people have take advantage of the benefits inherent in Obamacare or the ACA law.

 

  • Billions in tax credits.
  • Richer and mandated benefits
  • No waiting period of pre-existing conditions
  • No declination or rate-ups based on health

 

Great stuff if you get a tax credit or have health issues!

 

There are millions more who are priced out of the market.

 

The tax credit is based on a federal guideline.

 

$48K annual income looks very different in Iowa versus Los Angeles!

 

The more expensive States have seen the most pressure for alternatives to Obamacare.

 

Ironically, many of those States (California, New Jersey, New York) will likely refuse to expand the short term plans along political lines.


That still leaves health sharing plans which have a Federal exemption from the penalty!

 

We're happy to help with any questions.

 

Make sure to check out the short term versus Obamacare and health sharing versus Obamacare pages.

 

It's important to get the facts when considering alternatives.


For many people, it's not a question...they can't afford the ACA plans.

 

We're here to help explore which alternative might be the best fit for you.

 

Quote alternatives to Obamcare or ACA plans here

 

Again, there is absolutely no cost to you for our services as licensed Short term health agentsCall 800-320-6269 Today!

 


 

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