According to the Affordable Care Act (ACA), all American citizens require to have qualified health plans by 2018. It refers to the individual mandate. People had to pay a levy on their federal tax return if they didn’t. However, the individual mandate is no longer in force as of 2019. The individual mandate is no longer in force as of 2019. There is no longer any financial penalty for failing to receive health insurance.
But the worldwide pandemic has taught us one important lesson about medical expenses. Every single person needs health insurance since the medical costs are too much for us to bear out of our pockets. In recent years, two kinds of limited health plans are widely available by the federal government than ever before. The two types of limited health plans are Association health plans (AHPs) and short-term, limited-duration (STLD) health plans.
Association Health Plans (AHPs)
Association Health Plans are community health plans that employer groups and organizations create by pooling their workers to purchase insurance as a group. An organization that sponsors healthcare coverage via an AHP can buy or self-finance insurance through a state-licensed issuer. Personal AHP coverage may include individuals and sole owners.
AHPs were there for a long time, but changes were done by the new rules that came into effect in 2018. Under the new rules, the guidelines for AHP benefit coverage and spending are relaxed by the federal government. AHPs require to follow the same requirements as normal small-group and person programs under the Affordable Care Act. Along with this, AHPs now have more flexibility in determining how much coverage they can have under the new regulations. While regular health insurance providers must spend at least 80% of the money they collect in premiums on medical expenses. It is not the case in AHPs.
Since small companies have the right to select which benefits to give to their workers, AHPs are usually more competitive health plans. However, AHPs are not expected to include the 10 critical health benefits required by the ACA, including prescription drug coverage and recovery services. This also means less coverage.
Short Term Limited Duration Health Plans (STLDs)
Short-term, limited-duration policies were developed to offer comprehensive health care coverage for those who are temporary, without medical coverage. These plans usually have lower annual costs than most ACA-compliant plans because they are excluded from ACA benefit criteria.
Individuals who find ACA products too costly or do not want unnecessary coverage may want to consider STLD policies. But enrolling in one may expose people to increased risk. Earlier, the STLD coverage limit was up to three months under the Affordable Care Act. And the extension of contracts was also not possible. But now the new rules allow for up to a year of STLD coverage. The deal can then even extend for another two years.
Additionally, STLDs do not have the same degree of consumer security as ACA marketplace plans. Unlike AHPs, STLDs do not need to cover pre-existing conditions. It includes any condition for which the person obtained care during the previous five years before enrollment. Another drawback is that STLD policies may also enforce coverage dollar limitations on an annual or lifetime basis. They have the option of limiting the amount they pay for a covered service.
Conclusion
Limited Health Plans can have various disadvantages of their own. It includes failure to cover the ten essential benefits, higher charging rates based on gender, age, etc., no guarantee of renewing among many others.
However, Association Health Plans and Short-Term Limited Duration Health Plans also have many benefits. Some of them are: AHPs offer low rates along with a wide variety of choices to small business owners, lesser premiums in STLDs. Moreover, the inclusion of people with pre-existing conditions in AHPs. Also, healthy people can opt for STLD health plans and can save their money.
Teledoc Plans is an organization that provides such limited health plans. They offer minimum essential coverage plans complying with ACA guidelines. Click here to know more about the same.
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