Without a doubt, we are living in interesting times full of uncertainty. With the unemployment rate currently increasing rapidly, many individuals are now without healthcare coverage. For those looking for insurance coverage while they are between jobs, short-term limited-duration insurance (STLDI) is one option for many individuals that is far more affordable when compared to COBRA coverage that is available to many workers when they get laid off, or buying unsubsidized insurance in the individual market.
STLDI are temporary plans that cover major medical care, such as hospitalization or a serious illness. They benefit those that are uninsured, individuals between jobs, recent graduates, and anyone else currently in transition. They may not be as desirable for someone looking for fuller coverage plans under the Affordable Care Act. But in these uncertain times many are looking for coverage they can afford if they are on a tight budget.
For Alaskans in transition, STLDI plans are much more affordable than the average full-coverage plan. For example, the average STLDI monthly premium in Alaska is $119 with an average deductible of $2,971. In contrast, the lowest premium advertised by the two insurance companies in Alaska on the federal marketplace is more than three times higher at $416 with a deductible of $6,500, for a nonsmoking 35-yr old male.
Another benefit is that because STLDI plans are not part of the Healthcare.gov marketplace, enrollment can occur at any time. There is no need to wait for an open enrollment period. If someone has recently lost their job, this is a qualifying life event that allows them to sign up for a plan on Healthcare.gov. However, short term plans may be a more affordable option for an individual’s current circumstance.
Previously, STLDI plans were limited to three months and could not be renewed. But under the current federal administration, those requirements have been lifted. Short-term plans can now cover up to twelve months and be renewed three times, resulting in coverage that lasts approximately three years. During this time of uncertainty and economic upheaval, it is reassuring to have affordable coverage available for longer than three months.
Because Alaska has some of the highest health insurance premiums in the nation, it’s doubly important to have other affordable options that are accessible to more Alaskans. In 2018, 12 percent of Alaskans were uninsured, and that number has surely increased with the recent rise in unemployment. Having short-term coverage can help many Alaskans fill the gap while they are between jobs.
STLDI plans are not for everyone, but for those that understand what they cover and what they don’t, they are an affordable option that can protect them from bankruptcy if they have a major medical event. During this time of economic disruption, having more affordable options on the market is a good thing for Alaskans.
The Alaska Division of Insurance has confirmed that five insurance companies are licensed to sell STLDI in Alaska. These include Independence American Insurance Company, National General, HCC Life Insurance Company, Standard Security Life, and United States Fire Insurance Company.