What is Short Term Health Insurance?

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Health insurance in the United States can be quite expensive, and sometimes people need to find alternative insurance options. Many people use something called short-term health insurance. However, what is short-term health insurance?

Short-term health insurance gives someone temporary coverage during a lapse in permanent coverage, protecting them from expensive medical bills that may arise from unexpected emergencies. This plan will cover emergency hospital visits, prescription medications, and some doctor’s appointments.

Now that we know what short-term health insurance is, let’s dive into exactly what it covers, how much it costs, and who qualifies for short-term health insurance.

What Does Short-Term Health Insurance Cover?

Short-term health insurance varies on the plan that you choose. However, most short-term health insurance plans will cover emergency room visits, certain prescription medications, and some doctor’s appointments that are not related to pre-existing conditions. It can prove useful to research a short-term health insurance plan online.

Most short-term health insurance plans do not cover medical care costs for things like pre-existing conditions, mental health, and maternity care.

Short-term health insurance plans may have waiting periods, so you likely won’t be able to get short-term insurance right away. During this waiting period, the plan will not cover certain conditions at the beginning of the plan.

Generally, short-term health insurance plans have an overall maximum amount that they will pay out in coverage. However, exactly what the limit is varies on the plan.

Patients are urged to read the details of their short-term health insurance plans very carefully so they can understand the limitations of the coverage.

How Much Does Short-Term Health Insurance Cost?

Most of the time, short-term health insurance plans are more affordable than more traditional, long-term health insurance. Short-term health insurance plans are available for as little as $55 per month. Long-term health insurance plans are typically at least $225 a month, even if the plan only covers one person. Of course, these prices vary depending on the type of plan implemented and the number of people covered by the insurance, but short-term health insurance is usually cheaper than other options.

Some short-term health insurance plans cost about $100 to $200 per month.

Short-term health insurance is typically cheaper than long-term health insurance because the plans do not have to cap patient out-of-pocket costs like ACA-compliant plans. This means that short-term health insurance companies can offer very high deductibles and relatively low monthly premiums.

The monthly cost of short-term health insurance isn’t the only cost you have to consider when thinking about getting this type of insurance. You also have to think about the cost of co-pays and out-of-pocket expenses.

Because short-term health insurance only covers the cost of a few medical expenses, you will have to pay for many medical care costs out-of-pocket. Also, most short-term health insurance plans don’t cover the entirety of the cost of emergency room visits and other medical care services.

Who Qualifies for Short-Term Health Insurance?

Anyone can qualify for short-term health insurance. However, if you are pregnant, are insured by another health insurance plan, have been diagnosed with AIDS or HIV, or qualify for Medicaid, you likely won’t be approved. However, this varies depending on the insurance company.

Every insurance company is different, so it’s important to keep in mind that some of these qualifications will vary across different organizations. Make sure to read the fine print of the plans you are considering carefully so that you will be able to understand who qualifies and how much it will cost.

To get short-term health insurance, you will need to fill out a questionnaire. It will ask you questions about your health and any pre-existing conditions that you may have.

How Long Does Short-Term Health Insurance Last?

Short-term health insurance is meant to last for less than 1 year, but you can be enrolled in the same plan for up to 3 years at a time.

Short-term health got its name because of how long the plans are meant to last. If you think that you will have to have short-term health insurance for more than one year, make sure the plan you enroll in can be renewed until you get long-term health insurance.

Luckily, you can cancel your short-term health insurance plan at any time. This means that if you get long-term health insurance after you enroll in a short-term health insurance plan, you can cancel your short-term health insurance without paying any cancellation fees, even if your plan was supposed to last longer.

Pros and Cons of Short-Term Health Insurance

Pros

Very Accessible and Easy to Get

One of the best things about short-term health insurance is how easy it is to get enrolled in a plan! For comparison, patients are usually only able to sign up for ACA-compliant health insurance plans during the annual open enrollment period at the end of the year or during a special enrollment period due to extenuating circumstances.

Getting signed up for a short-term health insurance plan is much easier and just involves answering a few yes-or-no questions about the patient’s health history. Once someone has signed up for short-term health insurance, their policy could take effect as soon as the next day!

However, sometimes it can be hard to qualify for short-term health insurance if you have pre-existing conditions or are pregnant. Luckily, if you are generally healthy, it is easy to qualify for short-term health insurance.

More Patient Control of the Insurance Plan

Patients have better control of their short-term health insurance plans, as they are known to be highly customizable and offer tons of convenient options. Customers can customize things like the policy length and the deductible and coinsurance amounts. The versatility of these short or long plans can be a huge positive for those who need them!

Premiums are Lower and More Affordable

Short-term health insurance plans have very low medical premiums that can be up to 38% lower than the premiums for unsubsidized health insurance plans that are under the Affordable Care Act (ACA)! This is because short-term plans have more restrictions than health insurance plans under the ACA.

Health insurance policies under the ACA and short-term policies are different in terms of what they cover, as ACA insurance plans are more robust and include coverage for essential health benefits and preventative care. ACA plans also ensure that patients cannot be denied their coverage based on pre-existing conditions or their health history.

Meanwhile, short-term health insurance plans do not provide any of these specific coverages or guarantees. Short-term monthly premiums are instead based on multiple factors. These factors include things like the patient’s age and gender, their health history or their pre-existing conditions, how many people will be on the policy, and any additional optional coverages that are necessary.

Short-term health insurance plans are nearly always cheaper than ACA-compliant plans, provide comprehensive coverage, and can often fit the patient’s needs. Websites that compare the two types of plans have found that cheaper ACA-compliant plans cost around $593 per month, while short-term plans typically cost a little over $100 per month.

There are No Enrollment Periods

A huge pro of short-term health insurance is the flexibility of their enrollment periods. These plans can be enrolled in at any time, and coverage can begin as soon as the day after you enroll!

This also means that if you are waiting to find out whether or not you qualify for Medicaid or Medicare, you can get short-term health insurance. However, you will need to get rid of your short-term health insurance once you are covered by Medicare or Medicaid.

Flexible Coverage For the Unexpected

Short-term health insurance is great because if a patient knows how long they will need the coverage for, they can sometimes make a simple, upfront payment for the whole policy instead of paying by the month! This can save someone a lot of money and better fit their personal health needs.

Some short-term insurance plans typically only cover emergency care, hospitalization, surgery, and outpatient care like lab work. This means that it will cover the expenses of emergency medical procedures. Some plans will be able to cover preventive care or prescription drug costs. Some short-term plans even allow the patient to choose their doctor and other healthcare providers.

Cons

Short-Term Plans Aren’t ACA-Compliant

Unfortunately, while short-term health insurance is made to be more affordable when it comes to temporary situations and treatments, it does not count as minimum essential coverage under the Affordable Care Act.

Short-term health insurance plans also do not cover preventive care services. In order to be an ACA health insurance plan, a plan must cover the cost of certain preventive care services.

Coverage is Limited

Short-term health insurance plans only last for about 30 to 364 days depending on a patient’s state. Short-term health insurance plans also aren’t necessarily available in every state. This short timetable of coverage may be helpful for some, but it can be detrimental to others.

ACA Subsidies Don’t Apply

Short-term health insurance is not eligible for cost-sharing reductions or premium tax credits. Only larger medical plans that are sold through state-based exchanges and HealthCare.gov legally qualify for subsidies. Some convenient online calculators can be used to find out if a patient can qualify for an ACA subsidy.

Is Short-Term Health Insurance Worth it?

Many people think that short-term health insurance is worth it because it gives people health insurance when they need it. Health insurance can be extremely expensive, but if you are in-between jobs and need health insurance to use during emergencies, short-term health insurance is great and relatively affordable.

However, short-term health insurance may not be the best choice for you if you need your insurance to cover the cost of prescription drugs, preventive care, and maternity care, as these types of treatments are often not covered by short-term health insurance plans.

Ultimately, it is up to you whether or not short-term health insurance is right for you. Before you enroll in a short-term health insurance plan, consider how healthy you are, how many people will be on the plan, and what type of medical care you need the insurance to cover.

Who Should Get Short-Term Health Insurance?

People who are in between jobs and are waiting for their new coverage to start will greatly benefit from enrolling in a short-term health insurance plan. If you are turning 26 and will no longer be able to be on your parent’s insurance plan, short-term health insurance coverage might be a good type of insurance for you.

If you are graduating college soon or are looking to get health insurance outside of the enrollment period for health insurance under the ACA, you should enroll in a short-term health insurance plan.

Watch the video below to learn the ins and outs of short-term versus long-term insurance!

Overall, short-term health insurance is incredibly useful if you are relatively healthy but need health insurance for a short period of time. While short-term health insurance can last for 1 to 3 years, it typically isn’t used for 3 years at a time. Most people only are enrolled in short-term health insurance plans for a few months at a time.

While short-term health insurance is great, it doesn’t cover a lot of medical care services that people need health insurance coverage for. Most short-term health insurance plans don’t cover the medical care costs of pregnant women. They also don’t cover the costs of prescriptions or preventive medical care. This is a problem for many people, as many people who are using short-term health insurance need to pay for prescriptions and preventive care. Because short-term health insurance doesn’t cover these costs, they have to pay for these costs out-of-pocket.

However, most people believe that short-term health insurance is beneficial for them because of how cheap it is and the fact that it covers the costs of emergency medical care. Because emergency medical care is often more expensive than preventive medical care, short-term health insurance is the best type of health insurance for many people.