Since it was signed into law on March 23, 2010, the $1.2 trillion Affordable Care Act (ACA) has proven unaffordable for a large percentage of Americans.  To escape the high costs, many individuals have sought relief in the form of short-term coverage plans.

These forms of insurance were created as a cheap alternative for individuals between jobs or for those enduring some other financial crisis.  Many Americans have found repeatedly renewing temporary plans to be cheaper compared to buying traditional coverage via the ACA.  Since the release of the ACA, sharply increasing penalties have been instituted on those who do not purchase the approved plans.  Penalties range from “…the greater of $695 per year up to a maximum of three times that amount ($2,085) per family or 2.5% of household income.”  Even with these penalties, major health insurance suppliers like EHealth and HealthMarkets Inc. have reported significant increases in their temporary insurance sales from 2013 to 2015 because their coverage is still cheaper than the ACA.

A new regulation that is set to take effect on January 1, 2017 will attempt to greatly restrict these plans by limiting coverage to less than three months, eliminating renewals, and requiring issuers to inform customers of the tax penalty upon purchasing the insurance.  ACA officials wish to eliminate short-term plans because they do not cover pre-existing conditions, total benefits are capped at $1 million, and one has to meet a standard of health to qualify.  These rules are prohibited by the ACA, but keep premiums low for consumers.

The popularity of short-term healthcare has exposed yet another flaw in the ACA.  Even as agency officials attempt to shut down alternatives, Americans continue to vote with their feet regarding the ACA.

  -- Leah Lagoudis