Short Term Health Insurance
Short-term health insurance is a type of medical insurance plan for individuals and families that provides coverage for a short period. They are usually less expensive than Affordable Care Act plans (ACA) so they can be a good option for filling gaps in your coverage at a lower cost. However, these plans have fewer benefits compared to other individual health insurance plans.
What is Short-Term Health Insurance?
Short-Term health insurance provides temporary coverage and often is purchased by people in transitioning periods who don’t want to engage in a long-term plan. It doesn’t provide a minimum of the healthcare benefits ACA requires, but they can be good in some life situations. This includes:
- Unemployed individuals who are in process of looking for a job that provides health insurance
- Students who study in another country than their hometown in the U.S. and are looking for temporary coverage
- Individuals who are waiting to be eligible for long-term coverage- for example, through Medicare
- Individuals who want to fill gaps in their current coverage
- Those who have missed the Affordable Care Act Open Enrollment Period and are waiting for a new one to start
- People who turned 27 and are no longer part of their parent’s health insurance plan
- Divorcees that were under spouses’ family insurance plan
What is covered under these plans?
Unlike ACA plans, Short-Term plans are medically underwritten which means that the insurance provider asks questions about your pre-existing health conditions. Based on its findings, the provider can deny you and your dependents to apply for this coverage.
This plan provides coverage for:
- Doctor visits but not for pre-existing conditions
- Drug prescription in hospitals
- Hospitalization, but not for pre-existing conditions (inpatient and outpatient hospital visits)
- Unexpected illness or injury
However, short-term plans can be combined with other supplemental insurance plans which may help you to get more coverage. This combination may include dental, vision, or critical illness coverage.
Although the benefits of short-term coverage can vary from plan to plan in most cases it will cover expenses due to emergencies so if you looking for preventive care coverage and doctor visits regularly this plan is maybe not the best option for you. Also, these plans don’t cover vaccinations, pregnancy, and maternity leaves.
How Much Does Short-Term Insurance Last?
Short- Term coverage typically lasts for three months (30 to 90 days) and you can renew your coverage after expiration but there’s no guarantee that the insurance provider will accept your application again. However, in some cases, it can last up to one year (12 months) and be renewable for additional two years.
When you enroll in this insurance your insurance policy usually starts within 1 to 14 days.
How much does it cost?
It is important to know that this type of insurance doesn’t protect you from tax penalties. You still may have faced with Affordable Care Act penalty on your federal tax return because you were being under-insured if you decide to enroll in a short-term health plan.
Your costs are depending on the care you are receiving and your type of plan so you’ll need to make copayments or pay for certain out-of-pocket services. Also, there is a MOOP (maximum out-of-pocket) expense you’ll need to pay before your insurer starts to cover your medical costs up to the coverage maximum.
However, short-term plans are still cheaper in comparison to major medical plans, even up to 80%. The national average premium for short-term insurance is 110$ per month and for major medical plans is approximately 286$.
How to qualify for short-term insurance?
Everyone can qualify for this type of coverage but you’ll have to answer previous health questions about your medical history so your insurer will maybe not accept your application based on pre-existing conditions like cancer or heart disease.
However, you may get an automatic disqualification based on these conditions:
- You aren’t a legal U.S. citizen
- Can qualify for Medicaid
- Have sexually transmitted diseases like HIV and AIDS
If you don’t qualify for short-term insurance you’ll still have some other options to get coverage.
These options are:
- You can wait for ACA Open Enrollment Period to kick again
- Check if you qualify for the ACA Special Enrollment period: recent divorce, recent marriage, death of a family member with who you had your family insurance plan, etc.
- Purchasing some catastrophic policies like accident insurance (which can help you get coverage if you were injured in an accident), critical illness insurance ( which helps you to get coverage if you are diagnosed with some critically medical conditions like cancer), fixed-benefit indemnity insurance ( it gives you cash payout which you can use for office visits, surgery, and hospitalization)
Because short-term plans leave you with minimum medical coverage or even no coverage at all it is very important to be careful when you are searching for plan options. However, it also can be a good plan temporarily. If you aren’t sure what type of short-term plan best suits your needs and is most affordable for you, agents in Better Place Insurance Group can help you with your purchasing.