Everything to Know About Short Term Health Insurance

Are you facing issues affording a traditional health insurance plan? Are you currently waiting on your conventional health insurance to take effect? Perhaps you are planning to move out of your current state but still want healthcare coverage until you do so. If you nodded along to any of these questions, eHealth’s short-term health insurance plans can be the perfect fit for you. 

To help you learn more about these temporary health insurance plans, we’ve provided a thorough answer to “what is short-term health insurance?”, how it works, and how it can provide you with the type of healthcare coverage that you need.

What is short term health insurance?

Short-term health insurance refers to healthcare coverage that is available for a short period of time, such as a few months, with a limit on how many times you can renew your plan. By enrolling in such a plan through a month-to-month or one-time payment arrangement, you can get temporary healthcare that is covered by a legitimate insurance provider. This makes sure that you receive financial contributions from your insurance company when you obtain any healthcare services that are covered by your plan.

The specifics for short-term health insurance differ in terms of the extent of the offered benefits, as well as the coverage duration of available plans. These plans typically provide you with coverage against emergencies such as unexpected illnesses and injuries, with their benefits varying on a case-to-case basis. These factors are usually dependent upon the state you live in.

While short term plans do not cover the minimum required covered benefits by the Affordable Care Act (ACA), they have some advantages that make them appealing to some.

How do short term health insurance plans work?

Unlike ACA plans, there is no open enrollment period for short term health insurance plans. You can enroll any time of the year when you need short term coverage. Short term plans provide coverage quickly, with most applicants getting approved within 1-14 days, according to eHealth. The earliest short term coverage can take effect is the day after applying; depending on what your situation is you may want to choose a later effective date. Some details to keep in mind about short term plans:

  • If you are looking for coverage for not only yourself but your spouse or family, you can get dependents covered under short term health insurance.
  • Short term health insurance is medically underwritten (meaning the insurance provider looks into your health history), so you and all dependents will need to meet the medical requirements of the plan to get covered. You can renew short term health insurance two times (which could bring your total short term coverage limit for up to three years, if your state follows federal regulations), but whatever you’ve received treatment for under a preceding plan will be considered as a preexisting condition. You can also cancel your plan at any time without penalty. While you can get a federal subsidy to help afford ACA-compliant insurance, you will not be able to receive a subsidy to help pay for a short term plan, since short term plans are not ACA compliant. If you feel that you need more coverage, short term health insurance plans can be combined with other supplemental insurance plans – such as dental, vision, accident, and critical illness – to help round out your coverage.
Which states offer short term plans?

Due to controversy about short term insurance’s slim benefits, most states have their own laws about this kind of coverage. Some states simply set stricter limits for how long a person can be enrolled in a short term plan; this insures that people are using short term plans as temporary solutions, rather than depend upon it as their health insurance for years. Other states have banned short term plans altogether. 

No plans are sold in these states:

  • California
  • New York
  • New Jersey
  • Rhode Island
  • Massachusetts
What does short term health insurance cover?

Short term plans are usually low-cost and low-coverage plans. Since short term coverage is limited in what it covers and how it covers, the plans are often less expensive than ACA-compliant plans. This is largely because ACA plans are required to offer 10 essential benefits, but short term plans do not have a standardized list of benefits must be covered.

The ACA requires qualifying health insurance plans to cover 10 essential benefits:

  • Ambulance services
  • Emergency services
  • Preventative care visits
  • Hospitalization
  • Laboratory services
  • Maternity and newborn care
  • Mental health and substance use disorder services
  • Rehabilitation services
  • Pediatric services (including oral and vision)
  • Prescription drugs

When it comes to short-term plans, covered benefits will differ from plan to plan, but it’s very likely that a short term plan will cover healthcare costs related to emergencies.

Source: eHealth Insurance 

Short-term plans vary greatly, so you may be able to find a plan that will cover prescription drugs while others do not.
Additionally, you can be denied coverage if you apply for a short term plan. Unlike ACA plans, which cannot consider preexisting conditions for enrollees, short term plans can deny you coverage based on your health.
While you may be rejected if you have a pre-existing condition, you also might find that you’re required to pay more for your plan due to pre-existing conditions, or that costs related to your pre-existing conditions are not covered.
There also may be a cap on how much the plan will cover you annually or in your lifetime. For instance if the plan covers hospitalizations, but only up to $5,000 you will have to pay for the rest of the services you get in the hospital.

How much does a short term health insurance plan cost?

Short term health insurance tends to be cheaper than regular health insurance plans, like ACA or major medical coverage. According to eHealth, short term health insurance plans tend to be 80 percent cheaper on average.
For instance, a 40-year-old female would pay a $50 monthly premium for short term coverage in comparison to $253 per month for the lowest priced bronze plan. A family of 3 would pay $116 a month for short term coverage verses $862 a month for the lowest priced bronze plan.
The cost of a short term plan for both the 40-year-old female and family of 3 is around 1-2% of the median income.

What are some advantages and disadvantages of short-term health insurance plans?

There are various benefits of getting a short-term health insurance plan. But there are also some drawbacks that you need to keep in mind. Being aware of both aspects allows you to make an informed decision while learning how to get short-term health insurance for yourself or your family.

Advantages of Short-term Plans
  • Affordable: Costs are competitive and lower than major medical plans.
  • Swift: Coverage takes effect within 1-14 days. 
  • Effective: Coverage is acceptable in non-government situations such as medical schools or travel requirements.
  • Easy to cancel: You can cancel short-term insurance plans at short notice, especially if you pay for your plan on a month-to-month basis.
Disadvantages of Short-term Plans
  • Limited renewals. Short-term health insurance plans do not renew automatically and also have limits on how many times you can renew them.
  • Limited coverage. A temporary health insurance plan typically does not cover all of the 10 categories of essential benefits. 
  • Limited availability. Not all states or insurance providers across the U.S. offer short-term medical insurance.
How does short-term medical insurance differ from high deductible health plans?

After learning what is short-term health insurance, you may want to understand the difference between this temporary health insurance option and a high deductible health plan (HDHP). 

One of the biggest distinctions among both plans is that short-term health coverage is typically available for a few months with a distinctive cap on renewals. Whereas an Affordable Care Act (ACA) compliant HDHP can offer extensive coverage with ongoing renewals. This gives you a summarized idea about what is short-term medical insurance capable of offering as opposed to an HDHP.

Other major differences include the following aspects. 

Deductibles. Short-term plans have comparatively low deductibles, while HDHP options stick to their high deductible requirement.

Pre-existing condition coverage. Short-term plans usually do not provide coverage against pre-existing conditions, while an ACA-compliant HDPD does offer coverage for pre-existing conditions. Essential benefits coverage. Short-term plans typically do not offer essential health benefits for the 10 categories of outlined healthcare services. In comparison, an ACA-compliant HDHP has to do so.

Is short term health insurance right for me?

Short term health insurance is a great option for those who…

  • Are looking to fill gaps in coverage
  • Are waiting for coverage to kick in
  • Missed the ACA open enrollment period

Get a quote now by visiting eHealth and entering your zip code. eHealth carries over 1,600 short term health insurance plans from over 16 carriers. If short term health insurance is right for you, start shopping with eHealth right now.

How do you get a short-term medical insurance plan?

Figuring out how to get short-term health insurance is easy with resources like affinity coverage.

You can reach out to a licensed insurance agent, such as those on the affinity coverage team, in order to obtain your short-term health coverage plan or visit our short term health insurance page to get started.

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