short term health plans
Employee Benefits

Association Health Plans and Short Term Health Plans: In Search of Good Risk

Ed Oleksiak
Ed Oleksiak
Sr. Vice President, Employee Benefits

President Trump issued an executive order last year to offer Association Health Plans (AHPs) and Short Term Health Plans (STHPs) to expand lower cost coverage and, thus, cover more Americans. STHPs became available in some markets just last week. AHPs will start to become available in the near future.

While both these models will provide additional options in the marketplace, they will (in most cases) be targeting healthy individuals. Because there’s so much discussion going on in the healthcare world, it’s easy to get a little lost. So, I wanted to provide some details on what these plans actually mean and will cover.

Let’s start with STHPs. This type of health plan will:

  • Have dollar limits on coverage, won’t cover all the essential health plans, and will most likely exclude pharmacy coverage.
  • Be able to exclude individuals with pre-existing conditions.
  • Provide limited protection options to some healthy individuals who can’t afford a full-blown Affordable Care Act (ACA) plan but who don’t want to go without coverage.

As far as AHPs, they:

  • Haven’t been successful in the past, but there seems to be some traction around these in the marketplace now.
  • Can’t individually underwrite; however, they can be established around a target market with a healthier profile…specifically risk pools with a younger, healthier risk profile.

The ACA regulations have kept the health insurance industry from providing plans desired by the market. The result is a market looking for solutions like AHPs and STHPs despite the fact their applications will be limited.

As I mentioned, the healthcare world is a tricky place right now with respect to insurance coverage. The thing I can tell you for sure is that the discussion isn’t anywhere close to over. We’re keeping our eye on this and will let you know when we hear more!

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