There is an option available to people over the age of 60, who are in good health and want to save money on their health insurance premiums. In this post I want to share an option that falls outside of the mandates of the PPACA and is priced significantly lower. This option is not for everyone. If you want to have your annual physical paid for or you have a pre-existing medical condition you probably would not be advised to pursue this option further.
If, however, you are currently in good health, your state offers a high risk health insurance pool, like Texas does, and all you want to pay for is health insurance to protect your savings from being wiped out in the event of a major accident or illness, this option might be of interest.
Several health insurance companies offer what are known as “Short Term” plans. For illustration purposes I am going to use the ones offered in Texas by United Health One.
These types of plans are also known as Limited Benefit plans and fall outside of the mandates of the PPACA. In other words, new benefits like Preventive Care are not paid before the deductible has been met.
If you want the new mandated benefits from the PPACA, you need to look at a different type of major medical health insurance. This strategy is only advised for people who only want their health insurance to protect them in the event of a major accident or illness.
Since these are Short Term plans, rather than permanent plans, this strategy will require you to physically reapply at the end of each term. Assuming the PPACA is allowed to go into effect in 2014 this will mean that you will need to submit an application in 2011, 2012 and 2013.
Obviously, the risk is that your health may change for the worse in the future. If you live in a state with a high risk pool similar to the TEXAS HEALTH INSURANCE RISK POOL, the risk you face is minimal. If you live in a different state, be advised the new federal high risk pool requires that an individual goes without health insurance for a minimum of 6 months. Because of this requirement, this strategy has a greater risk and may not be suitable.
If your health changes and you are not able to qualify for another Short Term plan when your current policy expires, you are not out of luck if you live in a state with a high risk pool, like Texas. The Texas Health Insurance Risk Pool, aka THIRP will accept anyone with a pre-existing condition assuming they are able to prove that they have attempted to obtain health insurance through a private insurance company and were declined.
If, in your opinion, the risk is acceptable, here are 12 steps to starting a more affordable health insurance plan.
1. Choose an insurance company
Many insurance companies offer Short Term plans. For illustration purposes only I am using United Health One. You are free to use any health insurance company that provides Short Term plans in your state. Here are the instructions for people in Indiana, Michigan and Texas.
2. Enter your zip code
Most health insurance companies base their rates on the medical usage within a specific zip code. The more people in those zip codes seek medical treatment, the more expensive the premium will be.
3. Choose your effective date
Short Term plans are generally available to start as early as the day after you have submitted a completed application. While that is ideal for someone who has no health insurance of any sort, most people will have a policy expiring on the last day of the month. For them I recommend the Short Term plan to begin on the first day of the next month.
4. Answer if child only
While intending to make certain health insurance was available for all children in the U.S., regardless of their health, the PPACA left a big loop-hole when it comes to juveniles under age 19. Most health insurance companies have suspended writing policies for children only. They require at least one adult to be on a policy.
5. Enter your demographic information
Every insurance company is going to require basic demographic information about each person to be insured.
6. Get a quote now
This green button allows you to see what the prices for health insurance are going to be.
7. Select Short Term health
United Health One offers permanent plans with significantly more benefits as well as Short Term plans. By clicking on this tab you will only see the 3 Short Term plans they offer.
8. Customize your plan
Any place you see a box with an arrow allows you to change the options on your policy. By default, the boxes will be filled with the least expensive options, but be advised the cheapest thing is not always the best thing. I recommend that you change the default settings to customize your plan based on your own financial situation.
9. Compare plan details
If you are not certain which plan is best for you, click the boxes in this blue box of the plans you are interested in and then the “Compare” button. Your computer screen will change to show you a chart with the benefits of each plan.
10. Elect which plan is best
On this page you will find more information about the various plans so you may determine which plan best meets your needs. As you determine which plan is best for you, remember, you are not locked in to your plan choice for the rest of your life. This is a Short Term plan. When it expires in the future you will be able to change your mind.
11. Confirm your plan’s options
In step 8 you elected which options you wanted. This is another chance for you to change your elections before you commit to a plan if you desire.
12. Apply for your plan
Now that you have chosen which plan best meets your needs and customized it, you are able to apply for it by hitting the green button.
The application process is relatively easy and simplified. Once you chosen which plan you want and clicked the green “Apply” button, if you already have your credit card or check book available the application process should only take you 10-15 minutes, depending on your typing skills.
Once again I feel the need to warn you that this strategy is not appropriate for everyone. If you are in doubt that it is a good strategy for you, use the form to the right to contact The Insurance Barn.
If, on the other hand, you are willing to pay the bills for all the additional benefits and extra costs associated with the PPACA and routine preventive medical care out of your pocket and only need something in the event of a major accident or illness, this strategy might meet your needs.
Before you do, however, if you live in a state other than IN, MI or TX contact The Insurance Barn. The link does not work in other states. We will need to activate it for you.