What is Short-Term Health Insurance?

Short-term health insurance may provide you with temporary medical coverage in certain situations. Many of the features of these temporary health insurance plans differ greatly from traditional health plans.

What is short-term health insurance?

Short-term health insurance is a type of health plan that can provide you with temporary medical coverage when you are between health plans, outside enrollment periods, and need some coverage in case of an emergency. However, to get the most out of a short term health plan, you need to understand how they work, what they cost, and what they cover.

What does short-term health insurance cover?

Short-term health insurance coverage varies greatly depending on the plan and the insurance company you buy from. These types of plans are not required to comply with Affordable Care Act (ACA) guidelines. ACA plans are required to provide certain levels of coverage—called minimum essential coverage. Short-term health plans are not required to meet the same standards.

Short-term medical insurance typically provides some level of coverage for preventive care, doctor visits, urgent care, and emergency care. There may also be coverage for prescriptions. Some plans also offer cost savings for seeing in-network providers. Make sure to read the “exclusions and limitations” information before buying any plan. This will tell you what’s covered and not covered by a certain plan.

How much does short-term health insurance cost?

If you’re considering temporary health insurance, typical upfront costs include:

• Premium: This is the monthly fee you pay for having coverage. The premium will vary depending on the level of coverage you choose, including deductible and coinsurance, as well as the types of services covered.
• Deductible: The deductibles on short-term health plans can be significantly higher than other more traditional health plans. You pay out of pocket for services until you meet your deductible. Then your plan starts sharing costs.
• Coinsurance: This is the percentage of costs you share with your plan after you meet your deductible. It’s often shown as a percentage. Most short-term plans have a deductible and coinsurance.
• Copay: This is a fee you may have to pay when you visit a doctor; usually payable at the time of the visit. Some short-term plans require you to pay a copay for certain doctor visits.
• Other out-of-pocket costs: If there are health care services not covered by your short-term plan, you could end up paying all costs. For example, some short-term plans may not cover or may limit your coverage for maternity care, mental health or substance use services, vision care, or dental care—these are costs you’d have to pay yourself for any services you receive.

Other costs may apply depending on what type of coverage you buy. Read all plan information carefully before choosing so you are informed on what your plan may actually cost you.

What are the pros and cons to short-term health insurance?

If you’re considering whether a short-term health insurance plan is right for you, here are some pros and cons:

Pros:

• Designed to fill short-term gaps in coverage should you need it
• You can cancel coverage whenever you’d like without penalties
• You can typically choose a plan that covers you up to a year, if needed
• Many different plan designs are available, depending on insurance carrier

Cons:

• Significantly higher deductibles than traditional health plans with other possible unforeseen costs
• No coverage for pre-existing conditions and limited coverage for most services
• A medical questionnaire may be required to be approved for coverage
• Coverage is not mandated or standard, so plans vary greatly in covered services and costs with very little government oversight

Short-term health plans are not a good fit for everyone. For comprehensive coverage and benefits, make sure you enroll in a traditional health plan. This is either a plan offered through your employer or one you buy on your own through an individual insurance company or the Health Insurance Marketplace.

Short-term health plans vs. ACA health plans

Short-term plans were created to help fill temporary gaps in coverage that can occur in certain situations. These types of plans are typically not good substitutes for traditional health plans. They do not have to adhere to ACA standards. They provide limited benefits with generally much higher costs.

ACA health plans, on the other hand, must provide certain types of coverage as mandated by the government. They must offer coverage for essential health benefits like maternity and preventive care at 100%, mental health and substance use benefits, and more. Before you decide to purchase a short-term health plan, make sure you fully understand what types of care and services are covered and not covered. Read the exclusions and limitations information carefully.

Do short-term health insurance plans cover pre-existing conditions?

Short-term health plans are not a part of the Affordable Care Act (ACA), so they do not need to comply with those standards. That means pre-existing conditions are not covered in a short-term or temporary health plan. You can be denied coverage for a medical issue you’ve previously been treated for.

Is short-term health insurance a good idea?

Short-term health insurance may not be ideal for the long term. But there are some situations in which you may need temporary coverage and a short-term health plan may provide it:

• You missed open enrollment for a traditional health plan
• You lost or left your job
• You turned 26 and just transitioned off your parents’ health plan

Is a short-term health plan a good idea for you? As a first step, try to anticipate your upcoming health needs. Would costs for care be lower with a short-term plan than without? Explore plans available to you. Duration, types of benefits, and even costs can vary widely between insurance companies that offer these plans. Plans may also vary depending on the state you live in due to state regulations.

How do you buy a short-term health insurance plan?

Short-term health plans are sold through private insurance companies. Not all companies offer this type of plan (e.g., Cigna Healthcare does not offer these plans). These plans are not available through the Health Insurance Marketplace and do not conform to Affordable Care Act (ACA) guidelines. To buy a short term medical plan, you can search for a private insurance company that offers them. Make sure to read all details before you buy or enroll. These plans can vary greatly in cost and coverage.