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A Modern Healthcare article about the National Association of Insurance Commissioners’ 2018 Accident and Health Policy Report, reports that short-term health plans, greatly encouraged by the current administration, offer little coverage for enrollees.

The article reports that the average amount spent per dollar of premium paid by the five insurers bringing in the most premiums from short term plans was 39 cents out of each dollar. Some plans return as little as 9 cents out of every dollar paid in premiums on benefits.

“Compared to comprehensive plans that have to comply with the ACA’s rules, short-term plans’ coverage limitations often result in carriers paying out far fewer claims, or paying pennies on the dollar,” said Rachel Schwab, a research associate at Georgetown University’s Center on Health Insurance Reforms.

In contrast, the average return among comprehensive major medical plans in 2018 was nearly 73 cents on the dollar. ACA compliant plans are mandated to return 80 cents on the dollar.

Short-term junk plans return so little in part because they are not required to cover pre-existing conditions, essential health benefits like prescription drugs or maternity care, and can charge more based on health status.

There is big difference between “Insurance” and “Coverage.” Know what you’ll actually be getting before choosing a short-term plan.

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