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Alaska Short-Term Health Plans
Alaska short-term insurance provides healthcare coverage for a limited period – often a more affordable solution than a major medical plan that you’d find on the state’s healthcare marketplace exchange. While Alaska short-term health plans don’t comply with federal guidelines for the Affordable Care Act (ACA), popularly known as “Obamacare,” they can be a great solution for people who are in between jobs.
Many people turn to temporary health plans while they wait for coverage to start or experience an unpredictable life situation impacting health insurance such as a divorce or relocating to a new area. Alaska consumers find that premiums are often much lower due to limitations on benefits and covered medical services.
The state of Alaska doesn’t have state-specific regulations regarding short-term health insurance. As a result, Alaska defaults to the federal guidelines established under the Trump administration. Short-term health plans are offered for up to 12 months, with the option to renew for three years, beginning in January 2019.
In October 2017, Trump signed an Executive Order to promote healthcare choice and competition, directing various federal agencies to “consider proposing” new regulations. These new laws would reverse an Obama-era rule limiting temporary plans to 90 days with no renewal, and would return to previous guidelines for short-term plans.
Under this new approach, Alaska short-term health plans – as well as those in other states following the guidelines — could be sold with an initial term of up to 364 days. Insurers could allow temporary plans to be renewed, but the total duration couldn’t exceed 36 months.
This change created interest in insurance companies, reinvigorating the market for short-term plans, which in turn offered consumers greater choices in healthcare coverage. However, this change is expected to negatively impact the ACA marketplace exchanges as young, healthy consumers opt for lower-premium plans, leaving the sickest individuals on the guaranteed major medical plans.
This dynamic is expected to continue a cycle of healthier individuals leaving medical plans due to cost, causing increased healthcare coverage costs as insurers see greater risk to covering ACA enrollees.
What Isn’t Covered
Under federal rules, short-term health plans must carry a disclosure that they don’t comply with the ACA, and aren’t “minimum essential coverage” (MEC). MEC consists of a set of benefits that must be met as a standard of coverage for inclusion in marketplace exchanges.
Short-term plans can have lifetime and term benefit limits, and the ending of these plans won’t trigger a Special Enrollment Period (SEP) for reentering marketplace exchanges.
Consumers find that Alaska short-term health plans are more affordable as they don’t provide major medical coverage and have significant restrictions on services. Benefits covered are typically limited to emergency care and appeal to those who are young and don’t require regular medical services such as visits to their primary care physician or many prescriptions.
For many people, temporary plans have become an option for having healthcare coverage as major medical plans are too expensive. However, purchasing a short-term plan may make the insured ineligible for guaranteed-issue individual health coverage such as Health Insurance Portability and Accountability Act (HIPAA) or Consolidated Omnibus Budget Reconciliation Act (COBRA) if these individuals recently lost coverage from a group plan.
Also, in most cases, short-term plans don’t cover preexisting conditions such as diabetes, hypertension, and asthma, among many others. Temporary plans don’t guarantee coverage, and applicants may be rejected based on their health history.
If an insured develops a health condition on a short-term plan, it may be deemed a preexisting condition and prevent the policy from being renewed. Because of these limitations, short-term plans may not be ideal for everyone.
For those who are in good health and need basic coverage, however, it’s worth evaluating this option.
Alaska Short-term Plans
Five insurers are licensed to sell Alaska short-term health plans. The most active company is Independence American Life, which offers 12 different options.
These Alaska short-term health plans are indemnity policies. In simple terms, the policy allows consumers to direct their own healthcare and visit any doctor or hospital without limitation to those “in-network.”
Under indemnity plans, the insurer pays a set portion of covered medical expenses. These temporary plans are also known as “fee-for-service” healthcare plans.
Independence American Life indemnity plans are for three months’ duration. Deductibles range from $1,000 to $10,000, with a coinsurance of 20 percent, 30 percent, or 50 percent.
Policy payouts are limited to $1 million or $2 million, and out-of-pocket limits vary. These policies offer the ability to customize some of the coverage options.
Alaska consumers should be aware that these plans don’t meet the ACA’s guidelines for minimum essential coverage (MEC). Be sure to review plan details for exclusions and limitations.
With so many options, Alaska consumers have plenty of choices to get customized healthcare coverage for most temporary situations.
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