A provision in the ACA exempts short-term health insurance policies and other “excepted benefits” policies from the ACA coverage and underwriting standards.

An insurance industry veteran who helps match consumers with short-term health insurance coverage says he believes that most of the issuers in that market are now providing full COVID-19 testing benefits.

Jeff Smedsrud, the chief executive officer of Pivot Health, an organization that helps consumers buy supplemental health insurance products, and alternatives to major medical insurance, talked about short-term health insurance issuers’ responsible to the COVID-19 pandemic in a written commentary.

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Short-term health insurance issuers have had a tense relationship with some issuers of major medical insurance, and with defenders of the Affordable Care Act (ACA) major medical insurance framework.

Under ACA rules, insurers must sell and price coverage without using information about people’s health; cover at least about 60 percent of the actuarial value of a standardized “essential health benefits” (EHB) package; cover the products and services in the EHB package without imposing annual or lifetime benefits limits on coverage for those products and services; and cover a standard package of preventive services without imposing deductibles, co-payment requirements or other cost-sharing requirements on the patients.

A provision in the ACA exempts short-term health insurance policies and other “excepted benefits” policies from the ACA coverage and underwriting standards. In most states that allow the sale of short-term health insurance, issuers can use medical underwriting and take a free-form approach to benefit design.

Some critics of short-term health insurance, such as the authors of an article that ran March 18 on the Health Affairs blog, have argued that short-term health policies are “junk” coverage and will leave the insureds with large COVID-19 testing bills.

Smedsrud acknowledged that short-term medical insurance is different from major medical insurance, or COBRA continuation of employer-sponsored group health coverage.

“It is much more affordable than COBRA, but it is not comprehensive coverage,” Smedsrud wrote. “Additionally, those with pre-existing medical conditions may not be eligible.”

But short-term health insurance may be a good alternative for furloughed workers and others who cannot afford major medical insurance, because they are not eligible for much ACA premium tax credit subsidy help or for Medicaid, Smedsrud said.

The major providers of short-term health insurance have moved quickly to cover COVID-19 testing, Smedsrud said.

“Most are waiving [cost-sharing rules] rules, which means no costs for testing and diagnostic services,” Smedsrud said.

Many of the plans are providing for full reimbursement for health care provider assessments conducted through the web, or through other “virtual” systems, Smedsrud said.

For consumers who have bought multiple short-term health insurance policies, to extend the coverage past the ordinary 364-day limit, “neither the testing for COVID-19, or the diagnosis of COVID, would be considered a pre-existing condition for extension periods.”

 

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