As many Americans brace for increasing healthcare costs, the short-term health insurance plans promoted by officials during the Trump administration are drawing scrutiny. While these plans are marketed as affordable alternatives to those offered under the Affordable Care Act (ACA), they often come with significant limitations that can leave consumers facing unexpected medical bills.
Individuals like Robert Hays, an industrial electronics salesman from Arkansas, and Essie Nath, a retired cafeteria worker in Wyoming, have found themselves grappling with staggering medical expenses after obtaining these cheaper policies. Hays is now facing a bill of $116,000 for neck surgery, while Nath incurred $82,000 in costs related to heart failure. Similarly, Martin Liz, a chef in Key West, is burdened with bills exceeding $100,000 for knee replacement surgery.
Ken Swindle, an attorney representing Hays, criticized these policies, stating, “People think they’re getting comprehensive medical coverage, but they’re not, and they often don’t realize that until it’s too late.” The increasing costs of ACA plans, combined with the expiration of enhanced government subsidies, are pushing many consumers to consider these short-term options.
Understanding the Risks of Short-Term Plans
Short-term health insurance plans can be significantly less expensive—sometimes costing half as much as ACA-compliant plans. For example, a basic ACA plan for a 40-year-old nonsmoker in Florida might cost around $500 per month, while a short-term plan could be available for about $320. Despite their lower premiums, these plans do not provide coverage for essential health benefits, including maternity care and mental health services, and they are not required to cover preexisting conditions.
According to the Kaiser Family Foundation (KFF), five states have outright banned the sale of these plans, and another nine states have restrictions so stringent that no short-term options are offered. This leaves 36 states where such plans are still available. The lack of coverage for outpatient prescription drugs is particularly concerning, with nearly half of these plans failing to offer this benefit.
Insurance agents like Kelly Loussedes, vice president of the National Association of Benefits and Insurance Professionals (NABIP), emphasize the need for consumer awareness. “Costs continue to go up, leaving individuals, families, and businesses scrambling to find and keep the coverage they need,” Loussedes noted. “It’s essential that consumers understand these plans are not comprehensive coverage.”
Consumer Experiences Highlight the Dangers
The experiences of Hays, Nath, and Liz serve as cautionary tales for potential enrollees. Hays’s troubles began shortly after he purchased a short-term policy in May 2023. After injuring his neck while exercising, he sought medical attention only to be informed that his claims had been denied due to a preexisting condition. The insurer, Golden Rule Insurance, claimed that his injury was related to a previous car accident, a point disputed by his doctor. Hays has since filed a lawsuit against the company.
Nath encountered a similar issue when her application for a third short-term policy was denied based on preexisting conditions from previous coverage. After switching to indemnity coverage, her claims for heart failure treatment were also denied, leading to a legal settlement. Liz’s case illustrates the potential for denial even for long-term customers. After years of consistent payments, he faced a refusal for coverage related to knee surgery, with the insurer alleging fraud.
These troubling scenarios underscore the risks associated with short-term health plans. Despite the promise of affordability, many consumers find themselves lacking essential coverage when they need it most.
In light of the significant gaps in coverage, some industry experts express concern over the marketing practices surrounding these plans. A report by congressional Democrats noted that brokers were incentivized to sell short-term policies, sometimes using deceptive tactics that misled consumers about the scope of their coverage.
As the Biden administration has reinstated stricter limits on short-term plans, including a cap of four months, the Trump administration has signaled a willingness to redefine these policies again. The Centers for Medicare and Medicaid Services stated that short-term plans can provide crucial stopgap coverage solutions but also stressed the importance of informed decision-making.
With millions of consumers facing rising healthcare costs, the decision to opt for short-term plans requires careful consideration. While they may appear as a budget-friendly alternative, the potential for substantial out-of-pocket expenses can lead to financial distress for those who are unaware of the limitations inherent in such coverage. Consumers are advised to thoroughly research and compare health insurance options to ensure they choose plans that adequately meet their healthcare needs.
