One of the most obvious limitations associated with gap insurance is that it is not regulated by the federal government. This means that the insurance companies that offer these solutions are not required to adhere to the rules set forth by the ACA. This includes the requirement to accept individuals who have pre-existing conditions. Many have raised concerns about these unregulated policies, but it’s important to understand that many gap insurance plans are offered by reputable, established insurance companies.
Another limitation is the cost involved. Whether you’re seeking temporary coverage after a change in employment or gap insurance for high deductibles, you’re going to pay additional costs compared to a run-of-the-mill, ACA insurance plan. Shorter periods of coverage almost always result in less affordability, including higher deductibles and premiums. And of course, the supplemental nature of employment gap insurance means that you’re going to pay more fees per month in addition to your employee plan premiums. Of course, the trade-off is that your deductibles will be lower in the case of a medical emergency.
Cost-sharing plans represent a notable exception, as this option may be more affordable than even the cheapest ACA plans. Some crowdfunding plans require no deductibles and much lower average monthly fees compared to the premiums of a traditional insurance plan. This is why some individuals choose to stay with a cost-sharing plan permanently – even if they initially selected it as a temporary solution.
Speaking of temporary solutions, the most obvious limitation associated with traditional, temporary gap insurance is that it is not designed to last forever. This type of solution only gives you enough time to consider your options, wait for an open enrollment period, and select a more appropriate long-term insurance solution. Again, health sharing plans are a notable exception – as they can be effective either as short-term or long-term solutions.