Short-term health insurance: 4 things to know

The Trump administration released a final rule for short-term health plans Aug. 1.

Under the rule, Americans will be allowed to buy short-term health insurance plans that offer longer coverage. Previously, plans could only last up to three months. Coverage can now last less than a year, and extensions and renewals can last up to three years, depending on states' decisions. The rule is slated to take effect 60 days after publication in the federal register.

Four things to know about the plans:

1. Short-term plans do not have to abide by rules set by the ACA requiring coverage of essential health benefits and pre-existing conditions. They also do not have to comply with ACA rules that ban major medical plans from imposing limits on how much care is covered, or the ACA's requirement that at least 80 percent of premium money go toward care.

2. Because they aren't required to comply with these ACA rules, short-term plans tend to not cover as much care as more comprehensive, ACA-compliant plans. Specifically, they tend to not cover prenatal and maternity care; mental health and drug treatment; and prescription drugs, reports The New York Times. Research cited by the Times from Kaiser and the consumer advocacy group Families USA showed some plans also may not cover sports injuries and other medical issues such as cataract treatment, immunizations and chronic fatigue or pain treatment.

3. Short-term plans also have coverage limits. For instance, a typical short-term plan does not cover $250,000 to $2 million in care, according to a Kaiser study cited by the Times.There may be other exclusions with short-term plans. Families USA found a plan in Illinois only covered inpatient stays that began on a weekday, and that some plans had coverage for certain care that didn't kick in for days or a month, according to the report.

4. Not having to comply with ACA rules means short-term plans are generally cheaper than more comprehensive coverage. The Kaiser study found the monthly premium for the least expensive ACA plan for a 40-year-old single man in Atlanta was $371, while $47 was the cheapest monthly premium for a short-term plan. In Chicago, an ACA plan was $305 compared to $55 for a short-term plan, in Phoenix, an ACA plan was $405 and short-term one was $36.

Read the full Times report here.

Morgan Haefner contributed to this report. 

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