Short-term health insurance can provide temporary medical coverage in certain situations. Many of the features of these health insurance plans are very different from those of traditional health plans. What is short-term health insurance? Is it suitable for you?
WHAT IS SHORT TERM HEALTH INSURANCE?
Short-term health insurance is a type of health plan that provides you with temporary health coverage when you need emergency coverage between health plans and outside of enrollment periods. But to get the most out of your short-term health plan, you need to understand how it works, how much it costs, and what it covers.
WHAT DOES SHORT-TERM HEALTH INSURANCE COVER?
Short-term health insurance coverage varies considerably depending on the plan and the insurance company that offers it. These types of plans do not necessarily follow the guidelines of the Affordable Care Act (ACA). ACA plans must offer certain levels of coverage, called “minimum essential coverage.” Short-term health plans do not have to meet the same standards.
Short-term medical insurance generally provides coverage for: preventive care, doctor visits, and emergency care. You may also have prescription coverage. Some plans also offer cost savings for seeing in-network providers. Be sure to read the “exclusions and limitations” information before purchasing any plan. There you can see what is covered or not covered by a given plan.
HOW MUCH DOES SHORT-TERM HEALTH INSURANCE COST?
If you’re considering purchasing term health insurance, the initial costs generally include the following:
- Premium: This is the monthly fee you pay for coverage. The premium varies based on the level of coverage you choose, including deductible and coinsurance, and the types of services covered.
- Deductible: Deductibles for short-term health plans can be significantly higher than for more traditional health plans. You must pay for services until you meet the deductible. Then the plan starts sharing the costs.
- Coinsurance: It is the percentage of costs that you share with the plan after meeting the deductible. It is often displayed as a percentage. Most short-term plans have a deductible and coinsurance.
- Copay: This is a fee you may have to pay when you see a doctor; It is generally paid at the time of the consultation. Some short-term plans require you to pay a copay for certain doctor visits.
- Other out-of-pocket costs: If the short-term plan doesn’t cover certain health care services, you may have to pay all of the costs. For example, some short-term plans may not cover or limit coverage for maternity care, mental health or substance use services, dental or vision care: these are costs you will have to pay for the services you receive.
Other costs may apply depending on what type of coverage you purchase. Carefully read all plan information before deciding to be informed about what your plan may cost you.
WHAT ARE THE ADVANTAGES AND DISADVANTAGES OF SHORT-TERM HEALTH INSURANCE?
If you’re not sure if a short-term health insurance plan is right for you, here are some pros and cons:
- It’s meant for when you need to cover short-term coverage gaps.
- You can cancel coverage whenever you want without penalty.
- You can usually choose a plan that covers you for up to a year if you need it.
- There are many different plan designs, depending on the insurance company.
- Deductibles are considerably higher than traditional health plans, and there may be other unexpected costs.
- It does not offer coverage for pre-existing conditions, and coverage for most services is limited.
- You may be required to answer a medical questionnaire to receive approval for coverage.
- Coverage is not mandated or standardized, so plans vary widely in covered services and costs with little government oversight.
Short-term health plans are not suitable for everyone. If you want comprehensive coverage and benefits, join a traditional health plan. The traditional health plan is a plan offered by your employer or one that you buy on your own through a private insurance company or in the Health Insurance Marketplace.
SHORT TERM HEALTH PLANS VS. ACA HEALTH PLANS
Short-term plans were created to cover temporary gaps in coverage that can occur in certain situations. These types of plans are generally not a good replacement for traditional health plans. They do not need to meet ACA standards. They offer limited benefits with generally much higher costs.
On the other hand, ACA health plans must offer certain types of government-mandated coverage. They must provide coverage for benefits associated with mental health and substance use, 100% coverage for essential health benefits like maternity care and preventive care, and more. Before you decide to buy a short-term health plan, make sure you fully understand what types of care and services it does and doesn’t cover. Please read the information about exclusions and limitations carefully.
DO SHORT-TERM HEALTH INSURANCE PLANS COVER PRE-EXISTING CONDITIONS?
Short-term health plans are not covered by the Affordable Care Act (ACA), so they do not necessarily have to meet those standards. This means that a temporary or short-term health plan will not cover pre-existing conditions. You may be denied coverage for a medical problem that has already been treated.
IS IT A GOOD IDEA TO BUY SHORT-TERM HEALTH INSURANCE?
Short-term health insurance may not be ideal in the long term. But there are some situations where you might need temporary coverage, and a short-term health plan can provide it:
- You missed Open Enrollment for a traditional health plan.
- You lost or quit your job.
- You turned 26 and lost your parent’s health plan coverage.
It’s a good idea to take out short-term health insurance? As a first step, try to anticipate your upcoming health needs. Will the costs of care be lower with a short-term plan than without a plan? Learn about the plans that are available to you. The duration, types of benefits, and even costs can vary widely among the insurance companies that offer these plans. Plans may also vary by state due to state regulations.
HOW TO BUY A SHORT-TERM HEALTH INSURANCE PLAN?
Private insurance companies sell short-term health plans. Not all companies offer this type of plan. These plans are not available on the Health Insurance Marketplace and do not follow the guidelines of the Affordable Care Act (ACA). To buy a short-term medical plan, you can look for a private insurance company that offers them. Be sure to read all the details before purchasing or signing up. These plans may vary considerably in cost and coverage.