Difference between a short term plan and major medical insurance reno policy
Our office is always keeping up with current events and changes to Reno health insurance. Short term health plans have become a topic of discussion lately. More of our clients are calling in asking about these plans and many people, including myself, are getting phone calls from a call center outside of Nevada trying to sell them over the phone. These plans attract buyers by having a significantly lower premium than a major medical insurance reno policy, but the benefits of the plan are also significantly less. There are a few key differences that buyers should be aware of before purchasing one of these plans.
A short term plan is not a permanent substitute to actual insurance
Although, you may have someone attempting to sell you a plan and passing it off as an alternative. The reason it is not a substitute is due to the list of exclusions that these plans have. For example, a plan may only cover you in the event of an accident, but not if you are sick. If you currently have a condition or take prescription drugs, those will likely not be covered as well. With a major medical insurance reno policy, you will have coverage if you go to the doctor, specialist, hospital, or emergency room. With a short term plan, that manner in which you are getting a service is important since it may be listed in the plans long list of exclusions.
These two plans pay out differently as well
Typically, a major medical insurance reno policy has copays for certain services. This is a flat dollar amount that you will pay when you walk in the door. A short term plan can also sound like it has copays. These plans reimburse you a certain amount for using a service. The difference is how much you will be responsible for. For example, if you go to the hospital and have a major medical policy, you might have a copay of $3,000. That means that no matter how large your hospital bill is, the most you will pay is $3,000. With a short term plan, the policy might reimburse you with a few hundred dollars but you will be responsible for the rest of the bill. This amount could be in the tens if not hundreds of thousands of dollars and that is not including the required care you will need after a serious hospital visit.
Max out of pocket vs maximum benefit
A major medical insurance reno policy will have a benefit called a max out of pocket. This is the total amount you can pay as an insured member in a calendar year for medical expenses. In 2018 the highest that can be is $7,350. Once you reach this amount in medical expenses, then the insurance company covers you for 100% of any costs after that. This is true even if you are receiving care for a separate issue. A short term plan will have the opposite effect. The plan will only give you a certain amount of cash and then no longer reimburse you. This is why a health insurance Nevada plan protects you from personal bankruptcy due to expensive medical bills.
There are many other differences that are not in this discussion. As your health insurance broker, our brokers can provide a more in-depth breakdown of how the plans compare. Please call our office at 775-828-1216 if you have additional questions or are interested in an insurance policy.