What Is Short Term Health Insurance?
Ever heard of short term health insurance and wondered if it’s the right fit for you? Whether you’re between jobs, waiting for a permanent policy to kick in, or simply need temporary coverage, short term health insurance might be your ticket to peace of mind. It’s a flexible, often affordable option that fills the gap in coverage—but it’s not for everyone.
In this guide, we’ll break down everything you need to know about short term health insurance, from its benefits to its limitations, so you can make an informed decision.
What Is Short Term Health Insurance?
Short term health insurance is a type of temporary coverage designed to provide health insurance for a limited period, typically from a few months up to a year. Unlike traditional health plans, it’s not bound by the same regulations under the Affordable Care Act (ACA). This makes it more flexible but also less comprehensive.
Key Features of Short Term Health Insurance
- Flexibility: Choose coverage periods from one month to a year.
- Affordability: Lower premiums compared to traditional plans.
- Quick Enrollment: Coverage can begin as soon as the next day.
- Customizable Plans: Select coverage levels based on your needs.
Who Should Consider Short Term Health Insurance?
Not sure if this type of insurance is for you? Let’s break it down.
Ideal for:
- Job Transitions: Waiting for employer-sponsored coverage at a new job? Short term health insurance bridges the gap.
- College Graduates: Fresh out of school and not yet covered by a full-time employer? This option buys you some time.
- Early Retirees: If you’ve retired early and don’t qualify for Medicare yet, this coverage could work as a temporary solution.
- Seasonal Workers: Need insurance only during specific times of the year? Short term health plans are a handy option.
What Does Short Term Health Insurance Cover?
This is where short term health insurance starts to show its limits. While it does provide basic medical coverage, it typically focuses on major health events rather than comprehensive care.
Typical Coverage Includes:
- Emergency Room Visits
- Hospital Stays
- Doctor Visits for Illness or Injury
- Some Preventative Care
What’s Not Covered?
- Pre-existing conditions
- Maternity care
- Mental health services
- Prescription drugs
Because it’s not ACA-compliant, short term health insurance isn’t required to cover the essential health benefits that other plans do.
Benefits of Short Term Health Insurance
Why might someone opt for short term health insurance? Let’s look at the perks.
1. Cost-Effective
For those on a tight budget, short term plans are often a fraction of the cost of ACA-compliant plans.
2. Fast Approval
Unlike other insurance options, which can take weeks to finalize, short term health insurance is almost instant.
3. Flexible Durations
Coverage periods are adaptable, making it ideal for temporary needs.
4. Freedom of Choice
Most plans allow you to choose your healthcare provider, unlike many traditional policies tied to a specific network.
Downsides to Keep in Mind
Of course, no plan is perfect. Here are the major drawbacks of short term health insurance.
1. Limited Coverage
If you need ongoing care or have pre-existing conditions, these plans won’t work for you.
2. High Out-of-Pocket Costs
Lower premiums often mean higher deductibles and out-of-pocket expenses.
3. Lack of ACA Protections
Short term plans aren’t bound by ACA rules, so they don’t offer the same level of protection or coverage.
How to Choose the Best Short Term Health Insurance
1. Evaluate Your Needs
- Do you need coverage for emergencies only?
- Are you okay with limited benefits?
2. Compare Plans
Shop around and compare policies to find one that fits your needs and budget.
3. Check the Fine Print
Understand what’s covered—and what’s not—before committing to a plan.
FAQs
1. How long can I stay on a short term health insurance plan?
Most plans last from 1 to 12 months, but some can be renewed up to 36 months, depending on state regulations.
2. Can I use short term health insurance as a substitute for long-term coverage?
Not really. Short term plans are meant to be temporary solutions and lack the comprehensive benefits of long-term policies.
3. Does short term health insurance cover pre-existing conditions?
No. Pre-existing conditions are almost always excluded.
4. How much does short term health insurance cost?
Costs vary, but plans are generally cheaper than ACA-compliant options, with premiums often starting at $50 to $150 per month.
Summary
Short term health insurance can be a lifesaver when you’re in a pinch, offering affordable, flexible, and quick coverage. However, it’s not a one-size-fits-all solution. It lacks the comprehensive benefits and protections of long-term, ACA-compliant plans, making it suitable for specific situations but not ideal for everyone.
Before choosing a short term health insurance plan, evaluate your needs, understand the limitations, and compare your options to ensure it’s the right choice for you.
Authoritative Sources
- Healthcare.gov
- National Association of Insurance Commissioners: naic.org
- Health Insurance.org