Often in life, events happen unexpectedly. Sometimes those events are a positive development, such as the birth of a child or being approved for a mortgage. Other times they are less positive, such as losing your job or learning your spouse is divorcing you. The latter situations may also carry one specific unfortunate byproduct: losing your health insurance.
Thankfully, for those in the state of Delaware, access to Short-Term, Limited-Duration (STLD) health insurance is available while you work to get back on your feet or settle into your new life circumstances. Read on to learn how to access STLD, how much it costs, and how it can work for you.
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How Does Short-Term Health Insurance in Delaware Work?
In Delaware, several insurers offer short-term health insurance plans. However, accessing STLD in Delaware is not as simple as calling an insurer and asking for coverage. You will need to apply formally, undergo medical underwriting, and accept terms that would not usually apply to standard health insurance plans.
Generally, to be eligible for STLD, you must be under 65 and in good health. Your health will be scrutinized via medical underwriting, a process that health companies use to evaluate their applicant’s health status. Though this sometimes involves having a healthcare professional evaluate you with a medical exam, STLD insurers may skip the exam and only look at your health records and history instead. If you are determined to be in poor health and thus are riskier to insure, the insurance company may deny you coverage.
If accepted, a short-term health insurance plan could provide next-day coverage for illness and injury for three months. Keep in mind this coverage is non-renewable, so when the expiration date approaches, do not expect to re-apply.
What About Pre-existing Conditions?
Delaware’s STLD plans don’t cover anything classified as a “pre-existing medical condition.” A pre-existing medical condition is considered a health issue you’ve been diagnosed with or sought treatments for in the past five years.
What Out-of-Pocket Expenses Can I Expect?
In general, STLD requires similar out-of-pocket expenses to insurance accessible through your employer or the healthcare marketplace. Expect to pay:
- Monthly Premiums: Monthly premiums serve as your monthly bill for the service. However, short-term plans may have lower premiums than a standard plan. In Delaware, the monthly premiums for STLD health insurance are about $100 per month on average.
- Deductibles: A deductible is an amount you pay before your insurance kicks in and starts to help pay for exams, procedures, and other care. Short-term plans can have high deductibles. Remember that the deductible frequently doesn’t apply to visits to your general practitioner or prescriptions. In Delaware, the monthly deductible for STLD health insurance is about $5000 per year on average.
- Coinsurance or Copay: Co-insurance and Co-pays are upfront costs one pays as part of a medical procedure, doctor’s visit, prescription, etc. While co-pays are pre-determined, co-insurance is based on percentage and only applies after paying your deductible.
As with a traditional or “comprehensive” insurance plan, STLD does have maximum out-of-pocket limits on your spending. STLD plans also limit how much the plan will spend on your behalf, such as $1 million, or how often you can see doctors or have prescriptions refilled. Remember that you can purchase add-ons for dental and vision coverage or accidents requiring medical transportation or emergency services.
Depending on which plan is available, it might be required that you use an in-network doctor or hospital and except in an emergency.
Is Short-Term Health Insurance ACA Compliant?
While most traditional primary health insurance plans must meet Affordable Care Act (Obamacare) requirements, short-term plans don’t need to do so because short-term plans are intended to meet needs temporarily.
ACA plans typically mandate that:
- Insurers can’t turn down coverage for your pre-existing condition or require waiting periods.
- The coverage provides preventative care to keep you healthy without extra costs.
- Insurers must pay for the 10 essential healthcare categories, including (but not limited to) emergency care, hospitalization, mental health and substance use disorder services, lab services, birth control, and more.
- There are no limits on covered benefits, doctor visits, or prescription drug coverage.
- Out-of-pocket spending is capped for consumers.
Short-Term Health Insurance
Traditional Marketplace Health Insurance
Meets ACA regulations for benefits
Covers pre-existing conditions
None; enrollment is open year-round
Open Enrollment Period or Special Enrollment Period
Up to 364 days
Can renew up to 36 months
Can renew indefinitely
Not available in some states
Available in every state
Because short-term plans don’t need to meet ACA standards, you’ll need to spend more time reading over the policy’s fine print to determine how your plan differs from traditional health insurance. However, while STLD plans are not mandated to be ACA-compliant, there are federal laws that govern their use.
Federal STLD Guidelines
At the national level, regulations dictate that short-term health plans can’t last longer than 364 days and can be renewed up to three times.
For the consumer, a short-term plan may not provide necessary expense coverage if you:
- Experience an emergency or severe accident
- Are diagnosed with a chronic condition
- Require an ongoing prescription
- Need everyday preventative care to stay healthy
In addition, ACA-compliant plans set your insurance rates based on only your age, where you live, and whether you smoke. Short-term plan rates can incorporate more factors, including your pre-existing conditions.
Most states and territories offer short-term insurance plans for sale. However, a few do not:
- New Jersey
- New Mexico
- New York
- Rhode Island
- Washington D.C.
Keep in mind that because 12 regions of the U.S. do not offer STLD plans, your coverage will be invalidated if you were to move there from a state that does.
COBRA vs. Short-Term Coverage
COBRA, otherwise known as the Consolidated Omnibus Budget Reconciliation Act, is a variety of health insurance that allows individuals and families who have lost their health insurance to stay on the same health insurance plan for a certain period of time. COBRA is mandated by the government but is still managed through your previous employer.
While similar COBRA has several aspects that make it distinct from STLD:
- Longer Application Period: Unlike short-term health insurance, COBRA claims take about a month to process and gain coverage. In contrast, STLD begins the moment you are approved.
- Less Flexibility: While short-term health insurance has relatively fewer features than traditional plans, COBRA coverage offers no ability to change your plan. Therefore, if you want to alter your coverage in any way, you’ll need to wait until the next open enrollment period.
- Cost: COBRA coverage costs significantly more than STLD coverage, averaging about $400-$700 a month for a healthy, single individual.
However, COBRA may be a good choice for some individuals if:
Previously Diagnosed Medical Conditions: COBRA plans are required to offer the same coverage and therefore must continue to do so, eliminating additional medical underwriting.
Longer Period of Coverage: COBRA coverage lasts considerably longer than STLD, specifically in Delaware. COBRA lasts for 18 months and can be extended for 36 months in some circumstances.
Regulations For Temporary Health Insurance in Delaware
In contrast to federal STLD regulations, Delaware mandates that policies cannot last longer than three months and cannot be renewed or sold continuously to the same person.
Delaware regulates and bans the continual use of these short-term plans due to concerns that consumers will opt for lower-cost plans and continue to renew the short-term version instead of seeking a potentially more-expensive traditional plan.
It’s important to remember that while standard STLD plans are not subject to ACA compliance, there is one exception in Delaware. Comprehensive health insurance is subject to ACA compliance, even if purchased on a short-term basis. Therefore, while the premiums may be slightly higher, you would enjoy the same level of coverage as before.
How Much Do Short-Term Health Insurance Plans Cost in Delaware?
A short-term health insurance policy in Delaware could be as low as an estimated $30-$60 per month for a 35-year-old nonsmoker. However, this low monthly price comes with a high deductible (such as $12,500). After you meet the deductible, the insurer could pay as little as 60% of costs, requiring you to pay 40%.
On the other hand, a short-term plan could cost as much as $200-$390 per month. With this plan, the deductible to meet is lower ($1000). Insurance pays 80% of costs after you meet the deductible, while you pay 20%.
A comprehensive health insurance plan for a 35-year-old could cost an estimated $390 per month (with a deductible of $8700, 50% co-insurance) to $760 ($0 deductible, 10% co-insurance).
When Should You Get Short-Term Coverage?
Depending upon your unique situation, a short-term, limited-duration plan may be best for you. For example, you may be able to gamble on going without a traditional plan if you’re in good health, only need coverage for a very limited time, don’t have any other insurance available to you, or have plenty of emergency funds for an unexpected medical emergency.
For example, imagine you moved to Delaware for a new job but are not eligible for the company’s health insurance plan until you’ve worked a month. Short-term health insurance can step in to cover the gap.
Situations That Could Require Short-term Insurance
Other situations that could require short-term insurance include:
- Retiring early and waiting for Medicare coverage to begin
- Missing marketplace open enrollment in Delaware
- You can access COBRA, but it’s expensive
- You’re in a waiting period for your new Delaware plan’s start date
- Graduating from college and needing coverage while you seek a job in Delaware
When to Find Alternatives to Short-term Insurance
In contrast, you should rule out STLD plans if you:
- Have pre-existing conditions or expensive prescriptions
- Think you need insurance for more than three months and can access it easily
- Require preventive care needs (such as a mammogram or annual physical)
- Have limited funds for emergencies
Other Considerations For Short-term Insurance
If you’ve determined short-term coverage is right for you and are evaluating various short-term coverage options, consider these factors:
- Monthly insurance costs for the premium
- Potential ongoing insurance costs, including deductibles and co-pays
- Possibly paying for preventive care out of pocket
- Coverage for specific health conditions you might have
- Coverage for specific providers you prefer
- Prescription coverage for your medications
Pros and Cons of Short-term Health Insurance
Advantages of Short-term Health Insurance
While short-term medical coverage doesn’t give you the same coverage as traditional health insurance, it does pose many advantages over being uninsured. Some of them include the following:
- Emergency coverage: A short-term health insurance policy can provide coverage for medical emergencies, which can cost up to $20,000 in severe circumstances.
- Cost: A low-cost, short-term plan can be a less-expensive way to deal with an insurance gap.
- Qualification and Enrollment: STLD does not require you to experience a “qualifying event,” such as a divorce or loss of employment. You do not need to wait for an enrollment period, as coverage can start the next day if approved.
- Coverage length: You can choose the period of coverage you need. This applies if you know you’ll only be without insurance for a month or two while you look for a job. However, remember that in Delaware, you can only carry short-term health insurance for up to three months.
Disadvantages of Short-term Health Insurance
Despite STLD being an excellent resource for those in a pinch, you’ll want to ensure to transition to a traditional health care plan as soon as you are able, as STLD offers the following limitations:
- Eligibility Restrictions: A short-term plan can deny you coverage if you have a pre-existing condition (including pregnancy).
- Coverage Limitations: Short-term plans usually place cost limits on policy-period benefits, are not required to cover the routine benefits you’d get in a regular health care plan, and do not offer preventive care for free.
- Lack of National Standardization: Short-term health insurance does not need to meet national ACA compliance requirements. Therefore, you will not be provided the same consumer protections as would through an ACA-compliant plan.
- Potential expenses: Although your monthly premiums may be lower, you could face higher out-of-pocket expenses if you visit a provider outside your network or experience an emergency.
- Limited availability: Only a few insurers offer short-term health insurance in Delaware, so you’ll have fewer choices than if you’re selecting between traditional plans.
How to Buy Temporary Health Insurance in Delaware
Look for the short-term plan on an official health marketplace website, such as HealthCare.gov or ChooseHealthDE.com. If you’re working with an insurance agent or broker to buy a plan, make sure your professional is licensed at the Delaware Department of Insurance website.
Regardless of how you buy the policy, make sure to ask the following questions:
- Does a reputable insurer offer this short-term Delaware healthcare policy? Does this short-term policy cover pre-existing medical conditions?
- Are the Delaware temporary plan coverage details available in writing?
- Can you enroll in this short-term plan without paying any additional fees?
Remember that, in general, the higher your deductible, the lower your monthly payment. However, a higher deductible can leave you with large medical bills and no coverage for your most urgent needs.