When one of Cindy Holtzman's clients told the Woodstock, Ga., broker he was considering dropping his Affordable Care Act plan because next year's cost approached $23,000 for his family of four, she suggested a new option: a back-to-back set of four, 90-day short-term plans, which would effectively give them a modicum of medical coverage for 2018.
An Obama administration rule limited short-term coverage to three months at a time because it was meant as a stopgap between more substantial policies. But several insurers, including big players Golden Rule and National General, now are sidestepping that rule by packaging three or four consecutive 90-day plans, with a one-time medical review upfront.
"I'm not pitching this to replace Obamacare, but when you're telling me you're going to get nothing," Holtzman said, "I want to throw this into the arena."
As premiums rise and some middle-class families feel they can't bear the costs of a more secure Obamacare plan with its coverage guarantees, brokers and agencies have unveiled a slew of alternatives.
Interest has grown after the Trump administration stopped paying insurers subsidies they use to lower deductibles for lower-income ACA policyholders, which caused premiums to rise. The administration has also signaled it will soon loosen restrictions for alternative coverage, including ending the rule that limits short-term plans to 90 days.
But advocates warn shoppers to carefully read the fine print and understand what they're buying. The plans might not cover what you think.
Most short-term coverage requires answering a string of medical questions, and insurers can reject applicants with preexisting medical problems, which ACA plans cannot do.
Because short-term plans fall short of ACA standards, policyholders are considered uninsured and face an IRS tax penalty, which could be hundreds of dollars for an individual or thousands for a family.
"If you absolutely cannot afford (an ACA-compliant plan) -- and you are sure you are healthy -- look at other plans. But they all come with the caveat that if you get sick, they won't give you much coverage," said Joel Ario, a former Pennsylvania insurance commissioner and now a managing director at Manatt Health Solutions, a consulting firm.
To keep premium costs low, the policies set annual and lifetime caps on benefits. Many don't cover prescription drugs, and most exclude coverage for maternity care, preventive care, mental health services or substance abuse treatment.