April 3. The mortgage. The private school tuition. Inflation gnawing at every line item. You look at your COBRA bill – $1,200 a month for coverage you barely use. A friend mentions short term health insurance. Half the price. “Just until I figure things out.”
That friend never had a claim denied.
April 10. Let’s rewind. Darien isn’t like other towns. High income. High expectations. Also high costs for everything – a single ER visit for a kid’s broken arm? $4,500 after the hospital’s “negotiated” write-off. You carry that risk daily.
Here is what the glossy mailer doesn’t print: short term plans are not ACA-compliant. No mandate penalty anymore – Connecticut dropped that in 2019. But the real trap sits deeper.
Pre-existing conditions? Excluded. Diagnosed with asthma five years ago? That respiratory infection you get next month – their algorithm flags it. Denied.
Maternity? Never. Prescription drugs? Maybe a $500 cap. Mental health? “Not covered” in tiny font.
May 1. A client, let’s call him Paul. Darien resident. Between jobs. Bought a short term policy from Carrier X. Premium: $187/month. Deductible: $7,500. Thought he was safe.
June. Paul wakes up with crushing chest pain. Ambulance to Stamford Hospital. Overnight observation. Stress test. EKGs. Total bill: $23,000. The short term plan paid zero – “symptoms suggestive of a cardiac event, but we do not cover diagnostic workups for undiagnosed conditions.” Read that again. They don’t cover figuring out what’s wrong.
Paul now owes the hospital. Still has the premium due next month.
May 15. The tax piece. Because nobody talks about it. Short term premiums: Can you deduct them? Technically, yes – as unreimbursed medical expenses, but only if you itemize and your total medical costs exceed 7.5% of adjusted gross income. For a Darien household making $350k? That means over $26,250 in medical bills before your first deductible dollar counts. Most people never cross that line. So no deduction. Zero.
Compare with an ACA silver plan – premiums often get the premium tax credit if your income dips. But short term? No subsidy. Ever.
The logic flows like this: cheaper sticker price → no underwriting of actual risk → you hold the catastrophic exposure → one bad day erases the “savings” tenfold.
May 22. Here is where things get twisted. Some brokers push short term as “gap coverage.” True, but only if you define “gap” as a hole deep enough to bury your savings. The only legitimate use case? You are leaving one group plan and have a confirmed start date for another within 60 days and you have no chronic conditions and you set aside cash equal to the maximum out-of-pocket. Even then – I’ve seen waiting period fine print. “Pre-existing condition look-back” of 12 months. Means any medication you took in the last year – blood pressure,cholesterol, thyroid – becomes grounds to deny a claim for anything related.
“But I’m healthy.” Every client says that. Until they aren’t.
June 1. Let me offer a different rhythm. Instead of short term, consider these three steps:
Step one. Call the COBRA administrator. Ask for a 60-day retroactive election period. You have 60 days from your qualifying event to decide. Do nothing now – stay uncovered but know you can retroactively activate COBRA if something happens. That’s free insurance for two months.
Step two. Look at a catastrophic ACA plan if you’re under 30 or qualify for a hardship exemption. Higher deductible, but covers preventive care and won’t exclude pre-existing conditions. Premiums in Fairfield County for a 40-year-old: around $380/month for a bronze HSA-qualified plan. More than short term’s $200, yes. But it pays when you need it.
Step three. Contact a navigator at Access Health CT. Even if you think you earn too much. Income fluctuations happen. You might qualify for a special enrollment period. No cost to ask.
June 10. The emotional center. You lie awake at 3 a.m. thinking: What if my kid gets appendicitis? What if I can’t work for three months? Short term health insurance preys on that anxiety. It sells you the illusion of control. The actual product? A lottery ticket where the jackpot is not going bankrupt from a routine gall bladder removal.
I have sold short term plans. Usually to clients who insisted. I now make them sign a disclosure form – my own, not the carrier’s – that lists every exclusion. Two pages. They read it. Some still buy. That’s their choice.
But you came here asking about Darien. So I’ll end with this.
July 4. Independence Day. Real freedom isn’t a low monthly bill. It’s knowing that when your daughter falls off her bike on the Post Road, you drive to the ER without calculating whether the visit will hit your $20,000 out-of-pocket maximum that doesn’t exist on your plan. Short term plans often have no OOP max. Unlimited liability. That’s not insurance. That’s a coupon for a hospital’s collection department.
Act on this tomorrow. Not next week. Check your current gap. Call your HR. Get a real quote from an ACA plan. If the numbers don’t work, then – and only then – look at short term as a 3-month bridge, with a separate bank account holding $15,000 in cash for the deductible you will face.
Because the heaviness you feel? That knot behind your ribs? That’s not fear. That’s your instinct. Still working. Still telling you: Don’t sign that short term application without reading the exclusion list three times.
Read it. Then call me. We’ll find a better way.