Avoiding Obamacare: Policy experts suggest short-term coverage

The White House says 2 million people have purchased insurance through exchanges set up by the Affordable Care Act.But a new loophole found in the law could encourage people to skip Obamacare all together.

The idea came from two policy experts Sean Parnell and Timothy Jost. They’re encouraging people to sign up for short-term health coverage, which they say, in the short-term, could save you money.

If you’re over 26, you have to buy a government-approved plan during open enrollment periods.Open enrollment closes in March, and doesn’t come back until October. If you don’t buy it before the enrollment period ends, you’ll have to pay a fine. For the first year, that fine will be $95 or 1 percent of your total income, whichever is higher.

But the 2017 Project, a conservative think tank, say skip Obamacare and buy short term insurance. They say the average plan for a healthy young male adult, making $35,000 per year can buy the Bronze plan, the cheapest available.

He’ll pay $2,343 a year for $6,300 deductible. But If he buys short-term insurance for a year, he’ll pay $759 a year for a $5,000 deductible. Even if he includes a $253 fine for avoiding Obamacare, he’ll pay $1,012, a savings of $1,331.

But Project Amistad’s Lead navigator Rosalva Hernandez said their suggestion may not be the best advice. She said for the first year, penalties are $95 or 1 percent of your income.But the second year, it jumps to $325 or 2 percent. And the third year, it jumps again, to $695 or $2.5 percent.

“So you may end up paying more just in penalties alone then what you would in having long-term insurance,” Hernandez said.

For those who intend on getting long-term insurance eventually, 2017 Project suggests buying short term insurance until the next open enrollment period in October, then getting your bronze, silver, gold or platinum plan.