What Is Short-Term Health Insurance
Short-term health insurance is a type of temporary coverage when you are outside enrollment periods, between health plans, or need emergency coverage.
Unlike long-term health plans, short-term health insurance (temporary health insurance) does not meet the standards set by the Affordable Care Act (ACA). This means pre-existing conditions are not covered and you can be denied coverage.
Short-term plans can last from one month to one year and cannot be extended. Usually, plans are designed only to cover major medical events. They do not cover treatments for substance abuse or mental illnesses.
What Does Short-Term Health Insurance Cover?
Each short-term health plan coverage varies depending on the type of plan and the insurance company. However, because these plans are not required to comply with ACA guidelines, short-term health plans don’t need to meet the same standards and coverage levels.
Typically, short-term medical insurance plans provide coverage for preventive care, doctor visits, urgent care, and emergency care. Under certain plans, prescriptions may also be covered.
Before you enroll, read all the information to ensure the plan covers everything you need.
Short-Term Insurance Exclusions
Notable exclusions for you to be aware of are pre-existing conditions and maternity coverage. Additionally, services for preventive, dental, vision and mental health care are often excluded.
Before enrolling, you’ll have to explain any pre-existing conditions (any condition that you took medication, consulted a health care professional, or have been treated for in the past 6 to 36 months before the start of the policy). Failure to disclose your pre-existing conditions could result in policy termination.
Why Short-Term Health Insurance
Short-term health insurance is not for everyone, but it certainly has its place. For many, short-term plans are used to bridge the coverage gap between plans or until the Open Enrollment Period opens. That is why it’s commonly referred to as “gap health insurance”.
Likewise, short-term plans do not have a preferred healthcare provider stipulation, giving enrollees flexibility to select healthcare professionals all over the United States. As well, most plans offer low premiums, and coverage starts just one or two days after application.
Is Short-Term Health Insurance For You
Even though short-term health insurance may not be for everyone, it may be the best health coverage option for you.
If you are in between jobs, a short-term plan may be the perfect option for you – especially if you did not elect for COBRA. Also, if you are waiting for coverage from your group health plan or are waiting to enroll in ACA, short-term plans may fit your needs.
Here are some questions to consider before you decide short-term health insurance is your best option:
- Are you in good health with no pre-existing conditions?
- What premiums and out-of-pocket expenses can you afford?
- Do you qualify for subsidies or Medicaid?
- How long do you need coverage?
- Do you need a full range of coverage benefits, or are your lifestyle and health suited to the coverage short-term plans provide?
- Are you outside of the Open Enrollment Period?
- How quickly do you need health insurance?
How Much Does Short-Term Health Insurance Cost?
Like all different insurance types, the cost of short-term insurance depends on the plan. As an enrollee, you will be responsible for a monthly premium, deductibles, copayments, and out-of-pocket costs.
Because short-term health insurance does not cover as much, premiums are often much lower than ACA plans. In 2018, the average monthly premium for a three-month short-term plan was $107.
The deductibles on short-term health plans are typically much higher than traditional health plans, and copayments are required for certain doctor visits.
And, of course, if you require health care services not covered in your short-term plan, you will need to pay all costs. This could include maternity care and dental care.
The Pros of Short-Term Health Insurance
If you’re still unsure of the benefits of short-term health plans with regards to your situation, here are a few pros of short-term health insurance:
1) Quick Results
You’ll often know if you qualify right after your application is complete and coverage can begin in less than 24 hours.
A small gap in health coverage is how many individuals fall into a hole they can’t get out of. Short-term plans can cover these gaps between long-term plans.
3) Lower Costs
Short-term plans often incur lower premium costs than ACA plans since pre-existing conditions are not covered.
Most short-term plans allow flexible term lengths. These lengths range from one month to almost one year.
5) Choice of Healthcare Professional
Short-term plan enrollees can go to a number of different doctors and healthcare professionals.
6) Gives you options on the go
Travellers, seasonal workers, and recent graduates can utilize short-term plans to ensure they have coverage during all phases of life.
The Cons of Short-Term Health Insurance
However, there are some downsides to short-term health insurance. Short-term plans are created for people in certain situations. Thus, here are a few cons to short-term health coverage:
1) Pre-existing Conditions
You will not get coverage if you have a pre-existing medical condition. If you do, coverage will be severely restricted.
2) Many Services Denied
Short-term plans do not cover many medical issues. Preventative care, maternity care, mental illness, and substance abuse are just a few of the ailments not typically covered.
3) No COBRA
You cannot qualify for COBRA health insurance once your short-term health coverage ends.
4) Read the Fine Print
Short-term insurance plans often do not have an out-of-pocket maximum. These plans may also institute a limit on the maximum amount an insurer could pay.
5) Not Renewable
Once your short-term plans end, you cannot renew it. You may struggle to find a new short-term plan once the old one terminates if you developed a pre-existing condition.
6) No Seniors
Most short-term insurance plans deny coverage to everyone over 65 years old.
“Obamacare” vs. Short-Term Insurance
ACA health insurance (Obamacare) plans have more comprehensive coverage than short-term insurance and can last for longer. It is also not possible to be denied coverage or denied the minimum essential health benefits.
Short-term health plans were created only to help fill temporary gaps in coverage that can occur; therefore, they are not suggested as substitutes to a traditional health plan. However, short-term insurance can be useful coverage to bridge the gap if you are in between jobs or waiting for the open enrollment period.
Other Types of Supplemental Insurance
With short-term coverage, you can purchase other forms of insurance to give you additional coverage.
- Accident insurance covers emergency room visits, hospital stays, medical costs, and more.
- Critical illness insurance pays enrollees a lump sum in the event of a variety of ailments, including heart attack, cancer, stroke, and many more.
- Dental and vision insurance options are also available.
Is Short-Term Health Insurance Right For You?
It depends on your situation. For many, short-term health insurance can provide the coverage needed in between different situations. However, short-term plans should not be utilized over the long-term. Individuals and families should look into long-term insurance plans over the long haul.
Short-term plans can be great options for individuals and families under certain circumstances. After educating yourself on these types of plans, one should seek the help of an insurance expert to guide them.
How Do You Buy A Short-Term Health Insurance Plan?
Short-term health plans are not available through the Health Insurance Marketplace as they do not conform to ACA guidelines. To enroll in a short-term medical insurance plan, you can contact a private insurance company directly.
The Best Short-Term Health Insurance Companies
The best short-term health insurance providers offer a blend of fast claim processing, flexible options, affordable premiums, and responsive customer service.
Our specialists will be able to provide you with a breakdown of plans from the best health insurance companies.
How Long Can I Get Coverage?
Term lengths vary by the state you live in and the type of plan. Some states allow for up to 12 months of coverage.
Can I Renew This Type of Health Insurance Coverage?
No. If you need coverage beyond your plan, you will likely need to apply for another short-term insurance plan.
How Quickly Can I Get Coverage?
Short-term health insurance coverage takes effect one or two days after your application is received.
Can I Get a Tax Subsidy for My Short-Term Health Insurance?
No. Short-term plans do not qualify for tax subsidies. However, because the premiums are cheaper, a short-term plan may still be a viable option.
Is Short-Term Medical Insurance Limited to Annual Enrollment Periods?
Short-term medical insurance plans are available year-round, and there is no need to wait for the open enrollment period.
Do Short-Term Health Insurance Plans Have High Deductibles?
The deductibles on short-term medical plans are typically much higher than traditional health plans. Some plans start at around $1,000.
Can I Cancel Short-Term Health Insurance Anytime Without Penalty?
Policy cancellation penalties are based on the terms in your insurance provider’s policy. It is to be expected that there will be a fee for early cancellation.
Can I Pair Other Plans with a Temporary Health Insurance Plan?
Short-term health insurance is often combined with other plans that are not covered, such as dental, vision, and critical illness plans.
Do Short-Term Health Insurance Plans Cover Pre-Existing Conditions?
No. Short-term insurance plans do not cover pre-existing conditions. Depending on your state, diagnosis or treatment would have been within the last 6 months to 3 years.