What is a Short-Term Health Insurance Plan?

Temporary Health insurance plans

Are you looking for affordable health options to supplement your insurance coverage? A short-term health insurance program (also known as a temporary health insurance plan) may be right for you! 

Short-term health insurance is a type of health insurance plan that provides coverage to you or your family members for a limited period. These plans are cheaper and offer fewer healthcare benefits than Affordable Care Act (ACA) plans. 

See how short-term insurance coverage works, if it’s right for you, and how Insurance Shopping can assist you in finding a short-term health insurance plan!

What exactly is short-term health insurance?

Short-term health insurance refers to a coverage plan that provides temporary healthcare benefits, typically for individuals in a transitory period. These health insurance programs offer low-cost coverage and help you fill a gap in your existing coverage. 

While these plans are less expensive than ACA-approved plans, they offer fewer medical care services. Nevertheless, these short-term health insurance plans are flexible and can be adjusted to meet the consumer’s needs. With temporary health insurance coverage, you can expect to: 

  • Get coverage quickly in case of emergencies or whenever you need it
  • Select the duration of coverage, which can range from 1 to 12 months in some states
  • Select deductible amount
  • Find lower insurance premiums than ACA compliant plans
  • Drop health coverage without any penalty 
  • Potentially be able to change or renew your coverage
  • Gain access to an extensive network of medical professionals

Please remember that short-term plans are not the same as catastrophic health plans. Catastrophic plans (also called high-deductible plans) have low premiums, high deductibles, and high out-of-pocket expenses, but they provide the same benefits as a health insurance plan. 

How do short-term insurance policies work?

Unlike ACA-approved plans, short-term health insurance plans do not have an open enrollment period. You can sign up at any time of the year when you need temporary or short-term coverage.

According to research data, most applicants get approval for a short-term coverage plan within 1-14 days of enrollment. In some cases, short-term coverage can begin the day after you apply; however, you may want to choose a later effective date depending on your circumstances. Here are some details to remember about short-term health insurance plans:

  • You can get coverage for dependents under short-term health insurance if you want healthcare benefits for yourself as well as for your spouse or family members.
  • Short-term health insurance programs are medically funded (meaning the service provider investigates your health history), so you and all dependents must meet the plan’s medical requirements to get temporary coverage. You have the option to renew your plan two times, and anything treated under a previous health plan will be considered a preexisting medical condition. You can also cancel your coverage at any time without incurring any charges. While you can obtain an Obamacare subsidy to help pay for ACA-compliant insurance, you will not qualify for premium tax credits to help pay for a short-term plan because they are not ACA-compliant programs. Suppose your existing plan does not provide sufficient coverage for your healthcare needs. In that case, short-term health insurance plans can be integrated with other supplemental insurance plans – such as vision, dental, accident, and critical disease– to help complete your insurance coverage.

What is the cost of short-term health insurance?

Short-term health insurance plans typically cost $107 per month for an individual based on a national average of programs offered by health insurance companies. In comparison, ACA coverage for an individual who does not qualify for subsidies costs around $477 per month.

Although short-term health plans do not cover everything, they provide consumers with affordable health options that help them avoid expensive medical bills.

What does short-term insurance typically cover?

Short-term health plan benefits differ from one plan to the next. Typically, a short-term plan will cover some healthcare expenses related to emergency conditions, but it will not provide the same amount of coverage as an ACA-approved plan. For example, a short-term plan does not include the essential health benefits offered by ACA plans. The Affordable Care Act requires qualifying health coverage plans to provide the following ten essential benefits:

  • Ambulance services
  • Emergency care services
  • Preventative care visits
  • Laboratory services
  • Hospitalization
  • Maternity and infant care
  • Mental health and drug abuse services
  • Prescription medications
  • Rehabilitation services
  • Pediatric services (including vision and oral care)

ACA-complaint health plan compared to short-term health coverage: A brief guide

Please keep in mind that this table only summarizes typical features of certain types of health plans, but the benefits and limitations of specific programs may vary. Therefore, you should always carefully examine the official documentation for any program you consider purchasing to ensure that you understand the benefits and limitations of that specific plan.

Unlike ACA programs, short-term health insurance programs can deny you coverage based on your preexisting medical conditions. Also, if you have short-term coverage and receive care for a preexisting medical condition, your program may not cover that care. You may discover that you will need to pay additional costs for coverage obtained through a short-term health insurance plan. A short-term medical insurance plan may also have an annual or lifetime cap on the amount of coverage it offers. For example, assume your plan covers emergency care expenses but only up to $5,000. In that case, you will be responsible for paying the remaining costs of in-patient care out of pocket. 

Who can buy a short-term health coverage plan?

A short health insurance plan is best for individuals who do not want to commit to long-term coverage. This includes the following:

  • Individuals waiting for long-term health coverage to begin, like through Medicare or an employer
  • Unemployed individuals who require temporary coverage while searching for a job with healthcare benefits.
  • Students who need temporary insurance coverage in the state where they attend school
  • Those shopping around for temporary health insurance to fill gaps in their health coverage
  • Those who missed the ACA annual enrollment period and need to wait until the next enrollment window to purchase an ACA plan
  • People who have reached the age of eligibility for their parent’s health insurance plan

This is an excellent option for people who have a coverage gap in their health plans but want to get some coverage while looking for an ACA-compliant program or a job with health insurance benefits.

If you cannot afford an individual ACA-compliant plan, you may want to consider a short-term health insurance plan in case of emergencies. This way, you can avoid paying high healthcare costs if you find yourself that you need medical attention.  

If a short-term health insurance plan seems like an excellent option for you and your situation, get started with InsuranceShopping right away and find a short-term program that meets your specific needs. Use our online tools to compare health plans and find the most affordable coverage for you.

What are the limitations of a short-term health insurance plan?

The main disadvantage of short-term health insurance plans is that they do not provide comprehensive coverage, as the ACA individual plan does.

Temporary health insurance plans are ideal for individuals who want coverage for a short period. Nonetheless, short-term health insurance plans may not offer services for the medical care you need. You may end up paying more for uncovered services or deductibles with a short-term health insurance plan than you would with an ACA individual plan. If you think that an individual and family health insurance plan would be a better option for your needs, check out the health coverage options available in your region. Insurance Shopping can help you compare ACA-approved plans and see how they work against short-term health insurance plans. 

It’s also worth noting that not all states offer short-term health plans and are currently unavailable in the following regions: 

  • California
  • New Jersey
  • New York
  • Massachusetts
  • Rhode Island

Also, you might not be able to renew your short-term plan once it has expired. Some states allow you to extend your coverage for up to three years, while others have strict requirements.

Is a short-term health insurance plan right for me?

A short-term health plan is an excellent option for those who:

  • Are looking to fill coverage gaps in insurance plan
  • Are waiting for a health plan to kick in
  • Missed the ACA annual open enrollment period

If you’re unsure whether a short-term plan is right for you, visit insuranceshopping.com to learn more about health insurance policies. We provide over 1,600 temporary health insurance plans from 16 different carriers. Start shopping with Insurance Shopping today, and let’s find the best plan for you together. 

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