Supporters of the nation's health law condemn them. A few states, including California and New York, have banned them. Other states limit them. But to some insurance brokers and consumers, short-term insurance plans are an enticing, low-cost alternative for healthy people.
Now, with new federal rules allowing short-term plans that last up to three years, agents said, some consumers are opting for these more dangerous policies. Adding to the appeal is the elimination of a federal tax penalty for those without comprehensive insurance, effective next year. Short-term health plans often exclude people with preexisting conditions and do not cover services mandated by the Affordable Care Act.
Colorado resident Gene Ferry, 66, purchased a short-term health plan this month for his wife, Stephanie, who will become eligible for Medicare when she turns 65 in August. The difference in the monthly premium price for her new, cheaper plan through LifeShield National Insurance Co. and the policy he had through the ACA is $650.
"That is a no-brainer," said Ferry, who considers the ACA "atrocious" and supports President Donald Trump's efforts to lower costs. "I was paying $1,000 a month, and I got tired of it."
He signed up his wife for a three-month plan and said that if she is still healthy in January, he will purchase another one to last six months. But Ferry, who is covered under Medicare, said if something happens to her before open enrollment ends which in Colorado is in January he will buy a policy through the exchange.
Walterman, 42, said he chose a short-term policy for himself, his wife and their 3-year-old daughter at a sixth of the price of more comprehensive insurance. "The plan isn't for everybody, but it works for me," he said, adding that he gets accident coverage but does not need such things as maternity care or prescriptions.
Short-term plans cost less because they cover less.
Some plans have exclusions that could blindside consumers, such as not covering hospitalizations that occur on a Friday or Saturday or any injuries from sports or exercise, said Claire McAndrew, director of campaigns and partnership for Families USA, a consumer advocacy group.
"People may see a low premium on a short-term plan and think that it is a good option," she said. "But when people go to use a short-term plan, it will not pay for many or any of their medical expenses."
The plans can exclude people with preexisting conditions such as cancer or asthma and often do not cover the "essential benefits" required under the health law, including maternity care, prescription drugs or substance abuse treatment. They also can have ceilings on what they will pay for any attention. Insurers offering such plans can choose to cover or not cover what they want.