RVers Using Short-Term Health Plans Should Brace for Changes

Remember the days you could pick a health insurance plan, pay your premium every month and not give it another thought until you become Medicare eligible? Now you have to know not only what’s ahead, but what is in the rearview mirror, because health insurance is changing lanes without signaling again! RVer’s often use short-term health plans as the health insurance of choice because they are portable and affordable. If you are a self-insured RVer, under age 65, this information is extremely important. 

Changes to Short-Term Health Plans

Short-term health plans are about to face legislative changes that may impact your policies’ future. In this article we are sharing the history of these plans, and the roller coaster ride they have taken since their introduction to the health insurance market. Get ready and buckle up because they are headed for the “off ramp” again. 

What Are Short-Term Health Plans

Short-term health insurance plans, also known as temporary health insurance or short-term medical plans, have been available in the United States for several decades. These plans were originally designed to provide temporary coverage for individuals in specific situations, such as those between jobs, recent graduates without employer-sponsored coverage, or individuals waiting for their Medicare coverage to begin.

Before the Affordable Care Act (ACA) was enacted, short-term health insurance plans were often characterized by their limited duration and coverage. They typically provided coverage for a few months to a year and were not required to comply with the same regulations as comprehensive health insurance plans. As a result, they often had exclusions for pre-existing conditions and did not cover essential health benefits.

In 2010, the ACA, also known as Obamacare, was signed into law by President Barack Obama. The ACA aimed to reform the health insurance market and increase access to comprehensive coverage. As part of the law, several changes were made to short-term health insurance plans. These changes included:

  1. Duration Limits: The ACA limited the duration of short-term health insurance plans to less than three months. This was done to discourage individuals from relying solely on short-term plans as a long-term alternative to comprehensive coverage.
  2. Essential Health Benefits: Short-term health insurance plans were required to cover a set of essential health benefits, including preventive services, mental health and substance abuse treatment, and maternity care.
  3. Pre-existing Conditions: The ACA prohibits insurers from denying coverage or charging higher premiums based on pre-existing conditions for comprehensive health insurance plans. However, this requirement did not extend to short-term plans, which could still exclude pre-existing conditions.
graphic showing short-term health policy, cash, and stethescope.

Previous Changes to the ACA

In 2017, under President Donald Trump’s administration, changes were made to the ACA, including the elimination of the individual mandate penalty. The individual mandate required most Americans to have health insurance coverage or pay a penalty. This change made it more attractive for some individuals to consider short-term health insurance plans as an alternative to comprehensive coverage.

Today, there are situations where using a short-term health insurance plan may be beneficial for individuals. However, it is essential to note that these plans are not a substitute for comprehensive health insurance, and their suitability depends on specific circumstances. Here are seven instances where this type of health insurance plan may be considered:

  1. Transition Periods: When individuals are between jobs or waiting for employer-sponsored coverage to begin, short-term plans can provide temporary coverage until they obtain comprehensive health insurance.
  2. Early Retirement: Individuals who retire before they are eligible for Medicare may use short-term health insurance as a bridge to coverage until they reach Medicare age.
  3. Non-Open Enrollment Period: Outside the annual open enrollment period for ACA plans, short-term health insurance can offer coverage for individuals who missed the enrollment deadline.
  4. Affordable Option: Short-term health insurance plans are typically less expensive than comprehensive plans, which can make them a more affordable option for individuals on a tight budget.
  5. Travelers: Individuals who frequently travel or live abroad may find short-term health insurance plans useful for coverage during their time away from their home country.
  6. College Students: Short-term health insurance can provide coverage for college students who are no longer eligible for their parents’ health insurance plans or cannot afford comprehensive coverage.
  7. Waiting Periods: Some comprehensive health insurance plans have waiting periods before coverage begins. Short-term health insurance can be used during this waiting period to ensure continuous coverage.

It is important to evaluate the coverage limitations and exclusions of short-term health insurance plans carefully. They may not cover pre-existing conditions, preventive care, or offer the same level of protection as comprehensive health insurance plans. Consulting with a licensed insurance professional can help individuals make informed decisions based on their specific needs and circumstances.

More Change is Coming

In July of 2023, President Joe Biden set about reversing a Trump-era regulation to put the “short” back into short-term insurance by limiting it to four months. The rules will prevent using short-term plans designated for a short period of time only and then the policy will cancel automatically. 

“Short-term plans are intended to provide temporary coverage as people transition from one source of coverage to another”

Neera Tanden – White House Domestic Policy Advisor

If you are currently on a short-term plan with benefits that automatically renew for additional periods of time you are “grandfathered on your plan” and can keep it to the expiration date. There are downsides to keeping your plan, however. If you are healthy now and get sick on it in the future and it is not time for Open Enrollment for the Affordable Care Act, you do not have a special enrollment period to make a change to the Affordable Care Act as short-term plans are not deemed “creditable coverage” under the ACA rules. 

Questions? We Can Answer Them

We have no doubt this new information may have raised questions or concerns for you. Our agents are knowledgeable and up to date on legislative changes and it costs you nothing but your time to call us to ask questions and review your own benefits if you wish to. We also have an extensive background in RVing, an fully understand your lifestyle and your needs. Use our Contact Form or simply give us a call at (800) 867-4330.

Coleen Elkins

Coleen Elkins

Coleen Elkins is the Managing General Agent at RV Insurance Benefits, and has been a full-time RVer since 2008.