Open enrollment for health insurance plans ends December 15 in most states. So what happens if you find yourself uninsured on January 1? You’ll want to act quickly to secure coverage to help pay for healthcare in the year ahead.
Fortunately, health insurance (and non-insurance) options exist: short-term medical insurance, faith-based plans, fixed indemnity coverage, special enrollment for an Affordable Care Act (ACA) plan, and Medicaid, to name a few.
These alternatives have become increasingly popular in recent years amid eased restrictions on non-ACA policies, such as short-term medical, and the repeal of the federal tax penalty on January 1, 2019. No penalty means health insurance choices have essentially opened the door to greater consumer freedoms.
That is to say, you don’t have to remain uninsured until the next open enrollment period comes around. Let’s take a closer look at the five ways you might get coverage:
1. Short-Term Medical Insurance
You may be able to quickly obtain coverage through a short-term medical plan. How quick? Approved applicants can choose a policy effective date as soon as the day after they enroll. That means if you apply on January 1 and your application is approved, you could begin coverage as soon as January 2.
Temporary health insurance plans also allow you to choose your policy length — 30 days to 364 days, depending on your needs and your state’s laws. Maybe you started a new job with the new year and need coverage to get you through your employer’s waiting period for benefits. Then, 30 to 60 days may be all you need. On the other hand, your situation could be more open-ended. In that case, you can select the maximum policy length available to you. If you need more coverage when your policy ends, some states allow you to apply for a subsequent policy.
Benefits vary based on the short-term health plan you select. Typically they include coverage for doctor office visits, in- and outpatient hospitalization, and emergency care — in other words, medical expenses related to accidents and unexpected illnesses. Some plans could also include non-insurance benefits such as telemedicine and vision care discounts or prescription drug savings cards.
Unfairly labeled “junk” policies by some, short-term plans have been around for over two decades. They provide legitimate health insurance benefits and offer a valid option for those who need temporary, affordable coverage. The fact that benefits are limited in nature can fuel the “junk policy” label; however, these limited benefits are also what keeps short-term plans budget-friendly.
That is to say, short-term plans are not for everyone. Those with pre-existing conditions may not qualify for coverage and would likely want access to the full scope of benefits included in an ACA plan. Those who do qualify, want affordable coverage and understand the limitations, may find short-term health insurance is the right choice.
Three considerations:
- Network-free plan options allow you to choose the doctors and hospitals you prefer.
- Coverage is limited, which means you won’t have access to all of the ACA’s essential health benefits (e.g., maternity).
- Availability and coverage duration limits vary by state.
Year-round enrollment? Yes
Guaranteed issue? No. You will need to answer some medical questions, and you could be denied coverage based on your health history.
Bottom line: Short-term health insurance plans provide budget-friendly benefits for those in-between times, allowing you time to find a more permanent option. They may not suit those with pre-existing conditions or who need ongoing medical care.
2. Faith-Based Plans
Membership in a healthcare sharing ministry is another way to access coverage that helps pay for medical care outside of open enrollment. Around 104 such ministries operate in the United States and, as of 2018, membership is estimated to be around 1 million and growing.
How does it work? People who share similar ethical or spiritual beliefs pay a fee to become members. Those funds are pooled and used to help members pay for one another’s healthcare. In addition to financial support, members also provide one another with spiritual support through prayer, messages or other means.
A healthcare sharing ministry may also be known as a health cost sharing ministry or faith-based healthcare organization. These arrangements can be attractive to those who want to save money on healthcare costs, adhere to certain values, and prefer to support and be supported by others with those same values.
Faith-based plans offer limited coverage and are not considered health insurance and do not receive the same legal protections health insurance offers. They are explicitly exempt from insurance regulations in 30 states and while there are no explicit exemptions in the other 20 states and District of Columbia, that doesn’t necessarily mean those states regulate them. Your ability to file complaints against ministries is limited. There’s no guarantee that your claims will be paid, though many ministries offer an appeals process for rejected claims.
Three considerations:
- Ministry membership can be a way to obtain affordable coverage that aligns with your personal values.
- Benefits are limited and do not include all of the ACA’s essential health benefits.
- These plans are not health insurance.
Year-round enrollment? Yes.
Guaranteed issue? No. You must meet the ministry’s requirements (e.g., be a Christian, not use substances), and not all ministries accept new members. You could be denied coverage based on your health history.
Bottom line: Faith-based plans provide an alternative to health insurance for those who want to contain costs and share medical expenses with like-minded people. They may not be the right option if you have pre-existing conditions or need ongoing medical care.
3. Zero Deductible Plans
Zero deductible plans, also known as fixed indemnity plans or limited benefit insurance plans, were created to supplement major medical insurance (i.e., ACA plans). However, if you are uninsured outside of open enrollment, they can be another coverage option, subject to state regulations.
As their name implies, these plans provide set benefits and are limited in nature. While other forms of health insurance may pay a percentage of your covered medical expenses, fixed indemnity plans pay a set benefit amount at a specific duration (e.g., per visit, per day, per week) up to the policy limit. Covered medical expenses may include things like doctor office visits, surgery, prescription drugs, and hospitalization.
How does it work? Benefits are paid directly to you following a covered event. When used alongside another form of health insurance, these benefits may help you lessen what you pay out-of-pocket toward your medical deductible, copayment or coinsurance amounts. You can also use your benefits for non-medical expenses such as childcare or transportation.
You may opt to have fixed indemnity insurance as a standalone plan; however, it can still be a budget-friendly alternative when paired with a short-term health insurance plan. If you later move to an ACA plan, you may keep your fixed indemnity policy.
A fixed indemnity plan may not be right for you if you need access to all of the essential health benefits included in an ACA plan.
Three considerations:
- Plans are typically deductible-free.
- Policies may stand alone or be paired with other coverage.
- Coverage is limited, which means you won’t have access to all of the ACA’s essential health benefits (e.g., maternity).
Year-round enrollment? Yes
Guaranteed issue? Not typically. You may need to answer some medical questions, and you could be denied coverage based on your health history.
Bottom line: If you are uninsured and need benefits to help with out-of-pocket medical costs, fixed indemnity plans can be a standalone alternative. Once you enroll in additional coverage, you can continue using your fixed indemnity benefits to lessen out-of-pocket medical costs.
4. Special Enrollment for ACA Plans
The end of open enrollment doesn’t necessarily mean you’re shut out of buying an ACA plan. Certain life events may trigger a special enrollment period, a limited time in which you can sign up for an individual major medical plan outside of open enrollment.
Circumstances that may warrant special enrollment include:
- Getting married or divorced.
- Moving to a new coverage area.
- Having a baby or adopting a child.
- Losing your job-based coverage.
Special enrollment periods
During this time you can also apply for ACA subsidies — premium tax credits and cost-sharing reductions that help lessen your monthly health insurance payments as well as your out-of-pocket medical costs throughout the year.
Special enrollment provides you with access to coverage that includes all of the ACA’s essential health benefits and is guaranteed issue. If you qualify for a subsidy, this may be the right option for you. If you don’t and affordability is a concern, you may consider alternative coverage.
Three considerations:
- Subsidies are available for ACA plans during a special enrollment period.
- This option provides you with access to all of the essential health benefits.
- Without a subsidy, this option could be the most expensive.
Year-round enrollment? Yes, for those who qualify for special enrollment.
Guaranteed issue? Yes.
Bottom line: If you qualify for a special enrollment period and ACA subsidies, then your decision is fairly straightforward. Under those circumstances, this option will provide the most coverage for your dollar. If you don’t qualify, you’ll want to look at alternatives.
5. Medicaid
Depending on where you live and what your life circumstances are, you may be eligible for free or no-cost health insurance through your state’s Medicaid program.
Under the ACA, some states expanded their Medicaid programs to cover anyone whose household income is below 133% of the federal poverty level. Others have established their own eligibility criteria. Learn more about your state’s Medicaid program.
While benefits may vary, each state’s Medicaid program must meet minimum federal guidelines. Medicaid is subject to ACA requirements and is thus considered minimum essential coverage.
If you qualify for Medicaid, it may be the most affordable way to gain the most coverage. Believe you can’t get Medicaid or just not sure if you qualify? Apply to find out.
Three considerations:
- You could pay nothing for coverage, if you qualify.
- Some states have Medicaid work requirements or have filed waivers to implement them.
- Not all states have expanded Medicaid.
Year-round enrollment? Yes, for those who qualify.
Guaranteed issue? Applicants must meet their state’s eligibility criteria.
Bottom line: Much like the special enrollment section above, if you are eligible for Medicaid, then you should probably enroll in it. You will get the most affordable coverage and broadest range of benefits available to you.
These are just a few common options if you miss open enrollment for 2020 health insurance. While there is no longer a federal tax penalty for being uninsured, there are plenty of reasons not to let your coverage lag. For example, you could very well end up paying 100% out of pocket for medical care.
It’s not too late to secure some form of healthcare benefits. Start exploring your options and get enrolled as soon as possible. That way you’ll have coverage if and when you need it as the year unfolds.
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