A fast-growing, short-term alternative to ObamaCare that allows customers to get cheap, one-year policies could put the government-subsidized plan into a death spiral.
The plans, the only ones allowed for sale outside of ObamaCare exchanges, generally cost less than half of what similar ObamaCare policies cost, and are increasing in popularity as uninsured Americans grapple with the requirements of the Affordable Care Act. The catch — that the policies only last for a year — is not much of a deterrent, given that customers can sign up for ObamaCare during open-enrollment periods if their short-term coverage is not renewed.
Other providers said they also see rapid growth in the plans, which have a typical monthly premium of just over $100, compared to traditional plans that cost an average of $271.
“It’s because the product is typically half the cost of ACA plans, and you can chose any doctor or hospital,” Health Insurance Innovations CEO Mike Kosloske told FoxNews.com.
“It’s because the product is typically half the cost of ACA plans, and you can chose any doctor or hospital.”
– Health Insurance Innovations CEO Mike Kosloske
As long as customers stay healthy, they can renew the short-term plans. If patients get sick while covered, the plans provide for their care until the end of the term, when customers can be declined. But such plans can work well with ObamaCare, because if stricken policyholders can still buy insurance through the Affordable Care Act, where insurers must charge sick and healthy people the same rate.