Tim Winard of Addison knew he needed to buy health insurance when he left his management job in manufacturing to start his own business.

It was the first time he had shopped around for coverage, searching for a plan that would cover him and his wife, who also was between jobs.

“We were so nervous about not being on a company-provided plan,” Winard says.

After speaking with an insurance agent, he decided against enrolling in an Affordable Care Act plan because he was concerned about the potential cost of the “Obamacare” health insurance. Instead, he chose a short-term policy, good for six months.

Six months later, Winard was still working on starting his business, so he signed up for another short-term policy, this one with a different insurer, for about $500 a month.

When he needed a colonoscopy, Winard, 57, called his insurance company. He says a representative told him to go to any facility he wanted for the procedure.

Early last year, he had the colonoscopy at a hospital in Elmhurst, not far from his home.

The procedure went well, and Winard went home right afterward.

Then came the bill.

The procedure

Periodic colon-cancer screening is recommended for people at average risk starting at 45 and continuing until 75, according to the U.S. Preventive Services Task Force. In addition to those for preventive purposes, doctors might order colonoscopies to diagnose existing concerns, as was the case with Winard.

There are several ways to screen, including noninvasive stool tests. A colonoscopy allows clinicians to examine and remove any polyps, which are then tested to see whether they are precancerous or malignant.

The final bill

It totaled $10,723.19, including $1,436 for the anesthesia and $1,039 for the recovery room.

After an insurance discount, his plan paid $817.47.

Winard was left owing $7,226.71.

The billing problem

Short-term, limited-duration insurance policies don’t have to follow rules established under the ACA because they are intended to be only temporary coverage.

As Winard experienced, benefits within the plans can vary, with some setting specific dollar caps on certain types of medical care — sometimes far below what it costs. What’s covered can be hard to parse, and the insurer generally gets the last word on interpreting its rules.

While some short-term policies look like comprehensive major medical policies, all come with significant caveats. Most have limits that people accustomed to work-based or comprehensive ACA plans might find surprising.

All short-term insurance carriers, for example, screen applicants for health conditions and can reject them because of health problems or exclude those conditions. Many don’t include drug coverage or maternity care.

The fact that short-term plans can cover fewer services, conditions and patients is why they generally are less expensive than an unsubsidized ACA plan.

The typical tradeoff is lower premiums versus what the plans actually cover.

Stunned that he owed more than $7,000 for his colonoscopy, Winard contacted his insurance company, Companion Life Insurance of Columbia, South Carolina.

An insurance representative told him in an email that it classified the procedure and all of its costs, including the anesthesia, under his policy’s “outpatient surgery facility” benefit.

That benefit, the email said, capped insurance payment “within that facility” to a maximum of $1,000 a day.

That definition surprised Winard, who says he read his policy to mean that there was a cap on what could be charged for the facility itself — not for all of the care he received there.

“I interpreted it to be a facility, like a recovery room or surgery room,” he says. “They defined it to include any services at an outpatient facility.”

His plan says it covers colon cancer screening at 80% after patients meet their deductible. It also covers 80% of the cost of drugs provided in an outpatient setting.

Winard, who had met his deductible, says he expected he would have to pay only 20% toward the cost of his colonoscopy. But he also wondered why the screening, performed at Endeavor Health Elmhurst Hospital, was categorized by the insurer as a procedure at an “outpatient” facility.

According to the email Winard got from his insurer, his policy’s $1,000-a-day limit applies to “treatment or services in a state-approved freestanding ambulatory surgery center that is not part of a hospital, or a hospital outpatient surgery facility.”

Elmhurst Health spokesperson Allie Burke says the hospital has an attached building where same-day outpatient procedures such as colonoscopies are performed.

Short-term plans have been sold for decades. But, in recent years, they’ve become a political football.

Out of concern that people would choose them over more comprehensive ACA insurance, President Barack Obama’s administration limited short-term plans’ terms to three months. Those rules were lifted in President Donald Trump’s first term, allowing the plans to again be sold as 364-day policies.

President Joe Biden, calling such plans “junk insurance,” restricted the policies to four months — a change that took effect one month after Winard’s procedure.

Trump is expected to reverse Biden’s reversal and again make them available for longer durations.

The resolution

In December, Winard hired an advocate, Linda Michelson, to help him parse his bill. They wrote to the hospital, offering to pay $4,000 if it would settle the entire bill — an amount Michelson says is about four times what Medicare would pay for a colonoscopy. Winard says the hospital declined the offer.

Spencer Walrath, another Elmhurst spokesperson, says the hospital’s prices “reflect the value of the services we deliver.”

Companion Life did not respond to requests for comment.

Scott Wood, who identified himself as a program manager and co-founder of Pivot Health, which markets Companion Life and other insurance plans, says there was room for interpretation in the billing and that he had asked Companion Life to take another look.

Shortly after Wood’s comment, Winard says he was contacted by his insurer and that a representative told him that, upon reconsideration, the bill had been adjusted — though he was given no specific explanation why.

His new bill showed he owed only $770.

Takeaway

Short-term plans can be appealing for some people because of the relatively low cost of their premiums, but consumers should read all of the plan documents carefully before enrolling.

Understand that the plans often won’t cover a full range of benefits, and check to see which services are covered and which are excluded. Check whether a policy includes per-day or per-policy-period dollar caps on coverage or other payout limits.

The federal government offers subsidies based on household income for ACA plans, which can make them comparable in cost to cheaper, short-term plans — but with a wider range of benefits.

In hindsight, Winard says he hadn’t understood the difference between ACA policies and short-term plans.

His advice?

Don’t rely solely on marketing materials — and always get a cost estimate, preferably in writing, before a nonemergency procedure like a colonoscopy.