FORT LAUDERDALE, Fla -- Consumers who bought short-term health insurance thinking they had found a better deal than “Obamacare” during the open enrollment season may be in for a shock when they show up at their doctor’s office this year.
The low-cost plans aren't required to cover basics such as prescription drugs or maternity care.
The Trump administration rolled back restrictions on short-term plans in 2018. But critics quickly labeled them junk insurance, warning they come with gaps and don’t have to cover pre-existing medical conditions.
Trump said the plans will offer “great health care at a much lower price," at a White House event in 2018 when the changes were announced, describing them as “somewhat different, result the same."
With premiums about a third of the cost of comprehensive coverage, short term plans are significantly cheaper but don't meet requirements under the Affordable Care Act. And while they cover major catastrophes such as a car accident, they don't have to cover the law's “essential” benefits — including mental health and substance abuse treatment and they won't cover pre-existing conditions.
The latest enrollment season, which ended last month, saw a big promotional push for short-term plans. It marked the second year the plans were sold under loosened restrictions, and some insurance agents say they fielded calls from confused consumers fooled by low monthly premiums but who missed the fine print about limited benefits. Coverage on most plans was taking effect in January.
Insurance experts also complained about aggressive and misleading marketing tactics by some third-party sellers targeting Hispanics and low-income consumers.
Nonetheless, short-term plans represent a fraction of the overall market.
Short-term plans have been around for years. Designed to help those switching jobs or retiring before Medicare eligibility, they were never intended to offer long-term comprehensive care. The plans have typically covered up to 90 days, but now can be renewed for up to 36 months.
Brian Felker bought a short-term plan last year in case of an emergency.
“It seemed like a good idea at first until I tried to go to the doctor,” said the 38-year-old musician from Austin, Texas. “It just ended up being worthless.”
He saw his doctor to get his ear unclogged after a day of surfing, get a routine blood test, and have an ultrasound done of his neck after his sister was recently diagnosed with thyroid cancer. The blood test came to more than $200, the ultrasound $500 and the ear flush $100 — all out of pocket.
Last month, he bought a more traditional plan covering doctor visits, wellness check-ups and prescriptions. Though it cost a bit more at $500 a month, he got a $300 monthly government subsidy.
“This is actually a huge relief,” said Felker, who began avoiding treatment under the previous plan.
In Orlando, Florida, Lisa Novak's short term plan didn't cover basic wellness check-ups or preventive care including mammograms.
But she said it was a short term solution after she left the law firm she had worked at for more than two decades to start a dog walking business. The 56-year-old paid $156 monthly for the past six months and then returned to a comprehensive plan.
“I knew what I was getting into," said Novak. “I basically just purchased peace of mind.
For some, buying a short-term policy may not have been so deliberate.
A 2018 study by the Urban Institute revealed consumers seeking full coverage by searching online for ‘Obamacare plans’ or ‘cheap health insurance’ often ended up at sites selling short-term plans — more than 50 percent of the time. It found websites often had limited information about what plans actually covered.
Some short-term insurance companies are calling customers directly and repeatedly, said Islara Souto, a program director for Epilepsy Florida, which helps consumers secure health plans in Miami.
“These plans are being targeted to those consumers in Spanish with misleading facts,” said Souto, adding some try to appear they’re from the federal marketplace by calling themselves the “Coverage Department."
Insurance brokers note consumers typically choose a plan based on low monthly premiums, making it difficult to convince the cost-conscious that paying more secures more coverage.
“I sold a lot of them this year,” said Leslie Glogau, an Orlando based broker, who sold 30 short-term plans this season — compared to one or two in past years.
She is quick to note short-term policies should not be construed as equivalent to a full policy, "but they market these plans as if they were comparable to Obamacare plans and they’re not.”
Jeff Smedsrud, CEO of Pivot Health, said roughly 1 million consumers are using short-term health insurance plans.
Pivot, which connects consumers to brokers and insurance companies, will sell roughly 50,000 plans this year. Short term plans account for less than 5 percent, he said.
“There’s been a pick-up no doubt. But not this monumental amount that really shakes up the market,” he said.
Jodi Ray runs one of Florida's largest programs that helps consumers sign up for health insurance through the college of public health for the University of South Florida. She said most can find an affordable plan that covers wellness visits, prescriptions and other comprehensive coverage.
Of the short-term plans, Ray cautioned, “We steer clear of those."