Short Term Medical Insurance - an unlikely beneficiary of the Affordable Care Act

Consumers beware: all STM policies are not created equal!

by Tony Novak, CPA, MBA, MT     June 5, 2015


Perhaps the biggest winners of the Affordable Care Act (ACA) marketplace shakeup are the firms that sell short term medical insurance (STM). This insurance completely bypasses the reforms instituted by ACA and is available to most consumers at a fraction of the cost of an Obamacare policy. STM does not fulfill the requirements of the "individual mandate" provision but apparently this does not deter consumer demand. These policies are issues direclty online in an application process that typically takes only a few mnutes. Policies and ID cards can be downloaded immediately. Individual insurance companies have reported gains in the number of short term medical insurance policies issued ranges between 40% to more than 100%.


Yet apparently not all STM products are created equal. I notice that two firms trigger most of the complaints routed through OnlineNavigator telephone service and that a couple of others have never triggered even a single consumer complaint. The problem with this line of comments is that if I start to name companies with higher than average complaints, I will almost certainly trigger a stern threat from an insurance company lawyer (it has happened in the past). Unlike the past, I no longer compile data on consumer help requests so there is no 'hard evidence' to back up this opinion. So instead, I'll just highlight the two best products, in my opinion, that have never triggered a consumer complaint.


The highest quality short term medical insurance, according to Freedom Benefits:


HCC Short Term Medical Insurance


Secure Short Tem Medical (IHC Insurance)


Third party consumer rating services like Consumer Reports and insurance complaint tracking services like National Association of Insurance Commissioners do not distinguish between short term medical insurance and regular individual health insurance in their consumer complaint data compilations so these sources are not helpful in confirming this analysis.