Short Term Medical plans are wonderful tools, if used correctly and judiciously. For example, if you’re between jobs, and need coverage for a short and definable period of time, they’re an inexpensive alternative to COBRA.
Or, you’ve started that new job, but there’s a 90 day waiting period until your new group coverage starts. Well, and STM plan will nicely fill that gap, offering protection until the group plan kicks in.
Maybe you’ve recently graduated from college or tech school, and need temporary coverage during your job search. Again, if you’re pretty confident that this will be a short time, say 3 or 4 months, then STM may be just what the doctor ordered [ed: couldn’t resist the pun, could you?].
But there are some pretty significant downsides to these plans, as well. Recently, I had occasion to exchange emails with a nice lady in a nearby town. Her daughter is taking some time off from school (college), and is unsure about how to go about getting coverage. Her daughter’s too old to be on her folks’ plan, but doesn’t have access to a group plan.
Which seems to mean that a STM plan would be the way to go.
But not so fast!
Since we really don’t know how long she’ll need coverage, we don’t how many months to buy (STM is typically sold in monthly increments). And as I noted above, I am leery of using STM’s for more than a few months at a time.
Why, you ask?
Simple: STM plans do not cover pre-existing conditions, and there is virtually no way to continue benefits once the plan runs out, even in the middle of a claim. Most plans limit “extension of benefits.” That is, once the plan ends, so does your coverage. A typical plan might extend those benefits for a period of time if you’re currently hospitalized. Okay, but what if it’s chemo, or some other condition that requires lengthy outpatient follow-up?
More tomorrow…
Well, look, I just learned something new. I don't think I've ever dealt with patients that have had an STM.
ReplyDeleteMost of the people I end up dealing with are the ones that didn't know they had some cruddy little calendar max on the policy and get surprised when the insurance only paid $2000 towards the service.
By the way, part 1 of hidden providers linked to you and Bill is up.
.
ReplyDeleteGlad to be of service! ;-)
I know that they don't, but I sure do wish folks would RTFC (Read The Contract), so that they wouldn't be surprised that a claim was only partially covered.
I harbor no illusions that my clients actually do that, but OTOH, none of the carriers I use have calendar year max's on most "normal" claims. Mental & nervous, etc, usually do, but most claims I hear about are more physical.
I'll check out that post of yours forthwith! (I love that word!)
Well . . . at least one of the carriers you and I use does impose annual maximums.
ReplyDeleteIn an attempt to compete with lesser priced plans, a major carrier has introduced a modified H/S (hospital/surgical) plan. With premiums about 40% less than a traditional major medical, this "Right" plan is all wrong in my book.
It proposes to reduce premiums by limiting what it pays for outpatient treatment. Sounds OK up to a point. They don't include doc or Rx copays and use higher deductibles. In doing so they limit their involvement in "minor" claims and reduce the premium.
But they don't stop there . . .
They impose limits on outpatient treatment of $2500 per year and overall limits of $100,000 per year.
So what's wrong with that?
Over 60% of surgeries are performed outpatient. Over 50% of ALL claims paid by a carrier are for outpatient services.
Do you really want your chemo or radiation treatment limited to $2500 annually? Do you want your rehab benefits to stop after a week when your doc says you need at least a month of services?
The carrier offering this is a major player in the health insurance market, and I personally think they are playing with fire. Expect lawsuits against the carrier, and the agents to begin in the near future.
.
ReplyDeleteYou're right, of course, and I missed that.
But I haven't been using them much lately, and didn't recall it in TIME.
;-))