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Arkansas Short-Term Health Plans
Starting in January 2019, Arkansas short-term insurance rules will follow federal guidelines. After the changes in healthcare regulations made by Washington during 2018, states that didn’t adopt their own laws defaulted to the federal rules.
Arkansas is a bit of an anomaly in that there are some laws in place that insurers are required to follow. Federal guidelines will be in place for term limits to temporary policies, but Arkansas state does have requirements regarding benefits and covered medical services or conditions.
While Arkansas short-term health plans may have initial terms of up to 364 days with a total renewal duration of up to three years, rates must be reviewed by Arkansas state. Temporary health plans must also have some state-mandated benefits such as coverage for colorectal cancer screening, gastric pacemakers, maternity and newborn care, prostrate screening, and temporomandibular joint disorder (TMJ) treatment, among others.
Insurers may implement their short-term health plans without review, but rate changes after their initial filing are required to be submitted to the Arkansas Insurance Department for state review. The process ensures that rates are actuarially justified, and that the plans include coverage as mandated.
Many Arkansas consumers seek an alternative to major medical coverage by enrolling in temporary health plans while they wait for coverage to start or experience a life change such as relocating to a new city or aging out of a parent’s health plan.
In August 2018, the Trump administration issued a final rule clearing the way for short-term health plans that don’t comply with the Affordable Care Act (ACA). According to Trump, “short-term, limited-duration insurance” could help millions who don’t want or need major medical health insurance providing the full range of benefits required by federal law.
Because short-term health plans aren’t ACA-compliant, many consumers didn’t seek this coverage until the “individual mandate” was repealed. This widely unpopular Obama-era provision of the law required that individuals purchase policies that met federal standards; otherwise, a penalty would be assessed unless taxpayers were eligible for an exemption.
The lower premiums offered by temporary health plans are largely because they don’t qualify as major medical coverage due to providing fewer benefits. Additionally, insurers don’t have to guarantee coverage to everyone who applies, allowing them to reject those individuals with preexisting conditions or limiting services.
What Isn’t Covered
Under new 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 have lifetime or term benefit limits, and when the temporary plans end, they don’t trigger a Special Enrollment Period (SEP) for reentering marketplace exchanges. While short-term health plans are an alternative to the more expensive “Obamacare,” they often preclude individuals from seeking policies through the marketplace outside of Open Enrollment, a period of time at the end of the calendar year in which to apply for coverage.
Consumers find that Arkansas short-term health plans have much lower monthly premiums due to the limitations of covered services. Benefits offered typically appeal to those who are young, in very good health, and who use little in the way of medical services or prescriptions.
Many Arkansas consumers who don’t require regular medical services such as visits to their primary care physician or prescriptions consider the trade-off worth the offset in the cost of the policies. Temporary health plans don’t guarantee coverage, and applicants may be rejected based on their health history.
A major difference is that short-term health plans don’t cover preexisting conditions such as hypertension, diabetes, chronic obstructive pulmonary disease (COPD), arthritis, among others. Another drawback is if consumers develop a health condition while on a short-term plan as it will likely be deemed a preexisting condition, making them ineligible for renewal or another temporary policy.
For many Arkansas residents, short-term health plans have become an option for having healthcare coverage if major medical coverage isn’t offered through their employer or they deem it as being too expensive. Temporary coverage may be a solution while seeking a better employment situation or waiting for the Open Enrollment period to begin.
Arkansas Short-term Plans
There are nearly 81 different Arkansas short-term health plans that offer a wide range of benefits and covered medical expenses. Duration of short-term plans varies from six months to 12 months or even 36 months.
Deductibles range from $1,000 to $10,000 or more. Coinsurance ranges from under ten percent to 50 percent and above.
Maximum coverage amounts are from $500,000 to $2 million. There are so many different policies that Arkansas consumers can customize coverage to meet their specific needs.
When evaluating health care plans, keep in mind that short-term plans don’t meet the ACA’s guidelines for minimum essential coverage (MEC). Be sure to review plan details for exclusions and limitations.
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