ACA subsidy uncertainty could fuel demand for short-term, supplemental health plans

He's now the founder and CEO of Flex Benefits, a company that focuses on sales of health insurance products that fall outside the jurisdiction of the Affordable Care Act major medical insurance requirements.

A year ago, he predicted, correctly, that the incoming administration of President Donald Trump would probably work to ease the federal regulations governing the sale of non-ACA products.

Related: Republican gains may boost short-term health rules first, strategist predicts

He now contends that non-ACA products like short-term health insurance, hospital indemnity insurance and critical illness insurance could help workers get through the turbulence hitting the major medical market now.

The cost of group health coverage is soaring for employers. Some workers face deductibles of $5,000 or more per enrollee.

People getting individual coverage through HealthCare.gov and other ACA public exchange programs are facing worries about whether Congress will keep the current, high level of premium subsidies enacted in response to the COVID-19 pandemic in place or let the subsidies return to the lower level that was in effect in 2019.

For workers who have employer-sponsored coverage or who will be getting individual coverage through an individual coverage health reimbursement arrangement, the products can help pay for routine care, before the workers have met their major medical coverage deductibles.

For workers who will have to buy for individual coverage without employer money and can't afford to pay the full premium, using individual products might be a way to buy time , Smedsrud said.

Workers in that situation could try signing up for the cheapest possible ACA exchange plan, Smedsrud said.

Workers who do not qualify for any subsidies will then get a 30-day grace period before they have to pay additional amounts, and workers who do qualify for subsidies will get a 90-day grace period, Smedsrud said.

Smedsrud said workers who have no other coverage option could consider combining short-term health insurance with as much ACA exchange plan coverage as one monthly premium will provide.

That way, the workers who take that approach will at least have some coverage in place while Congress is still talking about what to do about the premium subsidies.

"At least you would have some type of insurance," Smedsrud said.

If Congress puts high major medical premium subsidy levels back in place this spring, then the workers using the stopgap arrangements might might qualify for special, late enrollment periods and get major medical coverage back in place, Smedsrud said.