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When it comes to health insurance, the myriad of options can be challenging to weed through. It is no wonder that so many people become overwhelmed when trying to choose the policy that is best for their personal needs and preferences. Not only do you need to find the best fit for you and your family's specific health needs, but you also need to take into consideration the constraints of your budget. Health insurance is certainly not a one-size-fits-all approach.
Short term or temporary health insurance is a policy that is ideal for periods in life in which you need coverage for a limited stretch of time. Most often, people buy these policies to bridge the gap during transitional periods of life. Examples of this would be when you are in between jobs, when you are waiting to become eligible for Medicare coverage, or when you need health insurance and it is not the open enrollment period for a policy covered under the Affordable Care Act (ACA), otherwise known as Obamacare.
In August of 2018, the Trump administration cleared the way for the implementation of temporary health insurance by rolling out plans that do not have to comply with the regulations of the ACA. Referred to as Trump as “short term, limited-duration insurance,” this policy can be a good alternative for people in specific situations.
However, because there are a lot of rules that come with a short term health insurance policy, it is important to read all of the fine print before pulling the trigger. The last thing that you want to do is to be stuck with a policy that does cover your insurance needs in a time of crisis. Temporary policies tend to have a lot more holes in coverage than most people with a solid insurance policy are used to seeing.
One key difference in the new legislation is the amount of time that you can purchase with a short term policy. Under the Obama administration, short term insurance was only allowed for up to three months. This is because the type of coverage was simply designed to be a stopgap. Under the new Trump rules, temporary insurance can be purchased for up to 364 days. In addition, the new rules also allow you to extend that short term policy for up to three years.
When is short term health insurance a good idea:
There are certain instances in which short term insurance is the ideal choice for your personal health and financial situation. You would be wise to consider short term health insurance if you meet any of the following criteria:
- You are transitioning between jobs or you are a part-time worker and are looking for an alternative that is less expensive than the traditional COBRA plans.
- You retired early and are not yet eligible to receive Medicare.
- You are a student and are too old to be covered on your parent's health insurance policy.
- The cost of Obamacare is too prohibitive for your budget.
- You missed the open enrollment period of Obamacare and need coverage immediately.
- Your doctor of choice does not accept Obamacare and you want flexibility in your insurance plan.
Who is short term health insurance not for:
Short term health insurance is not designed for everyone. There are specific instances in which this type of coverage is not a good fit. If you fall under any of these categories, you are probably better off looking into Obamacare or an employer-sponsored health insurance policy:
- You suffer from a pre-existing chronic condition or require complex medical care.
- You are in poor health in general.
- You have experienced a serious medical hardship in the last five years that would prevent you from obtaining coverage at an affordable rate.
- You want the peace of mind that comes with having a comprehensive health care plan.
How is short term health insurance different from Obamacare?
While short term insurance plans are generally much less expensive than their Obamacare counterpart, those savings come at a cost. All ACA plans are required to meet the clearly defined 10 essential health benefits. These 10 benefits as defined by Obamacare are:
- Emergency care services
- Prescription drugs
- Ambulatory/outpatient services
- Maternity benefits and newborn care
- Laboratory tests and services
- Pediatric care, including vision and oral care
- Mental health care, substance abuse rehab services, and behavioral health services
- Hospitalization and its associated costs
- Preventative care and wellness services
- Rehabilitative care and services
10 Essential Benefits
Subscribers to a short term health care plan are not guaranteed to receive these 10 essential benefits afforded to those who choose Obamacare for their health insurance needs. Diving deeper into the differences between these two coverage plans, you will find the following distinctions.
- Availability of Coverage – Short term health insurance allows you to apply at any time of the year and you can be eligible for your benefits as early as the next day. With the ACA, there is a designated enrollment period and the benefits do not kick in until two to six weeks after enrollment.
- Duration of Coverage – Short term insurance comes with limits on the duration of coverage that last anywhere from 12 to 36 months, depending on the specific state regulations. In contrast, ACA plans do not impose limits on the duration of coverage.
- Maternity and Newborn Care – Those people insured with short term coverage do not receive standard maternity service and are only covered for complications. ACA members receive standard of care for all maternity and newborn care services.
- Prescription Drug Coverage – Short term insurance provides a drug discount card but not comprehensive coverage. Some plans may cover the cost of generic drugs, but name-brand or specialty drugs are not covered under this type of benefit. ACA is a better choice if you need access to more drug coverage.
- Rehabilitative, Habilitative Services, and Relevant Devices – Short term health plans only deliver this when mandated at the state level while the ACA plans boast full coverage.
- Substance Use Disorder Services – Similar to rehabilitative services, this is only covered with short term insurance at the state level while it is fully represented with the ACA.
- Oral and Dental Pediatric Services – The ACA will cover this in full while short term insurance coverage varies by state.
- Uninsured Tax Penalties – Starting in 2019, neither plans impose a tax penalty.
- Preventative Care – Some select short term health insurance plans offer preventative care benefits but they come with cost-sharing measures. The ACA mandates that all preventative care be covered without cost-sharing.
- Pre-Existing Conditions – One of the biggest drawbacks of short term health insurance is that it takes into consideration pre-existing conditions when evaluating an applicant. The ACA requires that these conditions are not a factor when processing the application for enrollment.
Refusal of treatments
When reading the fine print of a short term policy, it is important to understand what is not covered. While plans differ from state to state and between different providers, it is not uncommon for popular treatments to be refused. Here is a short, but not inclusive, list of procedures and services that may not be covered by a temporary plan:
- Hernia repair surgery
- Acne, moles, or other skin care treatments
- Injuries suffered from playing sports
- Cataract treatment
- Joint replacement surgery and services
- Routine immunizations
- Treatment for injuries incurred when the policyholder was under the influence of drugs or alcohol
- Treatment for chronic pain or fatigue
Monetary limits on coverage
In addition to limits on the types of treatments and services that are authorized, there also may be limits on the dollar amount of coverage. According to a study conducted by Kaiser, a typical short term insurance plan cuts off benefits at a maximum of $250,000 to $2 million. Insurance plans that follow the regulations set forth by the ACA are not allowed to impose maximum limits on benefits. Some temporary plans also impose daily monetary coverage limits for hospital stays or one-time limits for specific services. For example, a plan might stipulate that it will pay out more than $250 for an ambulance ride.
Pre-existing condition limits
Even something as simple as severe acne or seasonal allergies may disqualify you from being able to obtain a short term health care plan. Or you may be approved for the plan but be forced to pay a higher premium because of a relatively innocuous pre-existing condition.
Unlike plans that fall under the ACA that have a specific set of regulations across the board, short term plans vary widely in benefits coverage. This makes it more important than ever to ensure that you thoroughly understand all of the fine print before signing on the dotted line. For example, one plan stipulated that hospital stays may only begin during the week and inpatient stays that began with admittance on a weekend would not be covered under the plan. It is also not uncommon for some plans to have waiting periods on care. For example, some plans will not deliver benefits for cancer care treatment during the first month of the plan. This means that if you are diagnosed with cancer one week after enrollment into the plan, you will have to wait an additional three weeks to begin receiving treatment and services. In some extreme cases, this waiting period could be a matter of life or death. Additionally, no treatment is covered at all for the first five days of the plan.
Insurance brokers can play an invaluable part in helping consumers to secure cheap health insurance at the best possible rate. However, it is important to make sure that you understand what the broker is recommending to you. It is not always obvious if the plan that the broker is recommending is a short term policy or one that is supported by the ACA. It is up to you to read the details to ensure that you are getting what you want in a plan.
Despite all of their limits on coverage, there is no denying that short term policies provide an affordable health care option for those not needing an abundance of coverage. Depending on the market, many people are simply unable to afford some of the most costly plans that comply with the rules set forth by the ACA. A short term plan can save you hundreds of dollars per month over the more expensive Obamacare plans. For some people who cannot afford the premiums associated with a plan under the ACA, the choice becomes a temporary plan or no plan at all. If you are only looking for catastrophic coverage, a short term policy may be the best choice for your personal needs and budget.
Education and empowerment are key when choosing a health insurance plan. It is critical that you see in writing all of the pros and cons of each plan so that you can make an informed decision.
General Short Term Health Insurance FAQ
If you have a general question about short term health insurance, this is the right section for you. Below, take a look at the top general questions about this unique form of insurance.
What is short term health insurance?
Short term health insurance is exactly what it sounds like — a short term insurance policy that covers you for a specific time frame. This may be a few months, or even a year.
Should I buy short term health insurance?
If you're not currently covered by an insurance plan, you may want to consider purchasing short term health insurance. If you're experiencing a gap in coverage, a short term health insurance plan can help you reduce risk.
How much does short term health insurance cost?
This depends on a range of different factors including the state that you live in, the insurance provider you work with, the length of your policy, and the amount of coverage that you're given.
How to get short term health insurance?
As with most types of insurance policies, you can sign up for short term health insurance by heading online and applying for a quote or policy.
Who can get short term health insurance?
Pretty much anyone can get short term health insurance, but you'll still need to apply to individual insurance companies to see what coverage they're willing to provide.
Why is short term health insurance cheaper?
It's not always cheaper. There are a range of different health insurance policy prices depending on various factors. In some cases, it may be cheaper because it's shorter. Be sure to check if discount dental plans are a part of your coverage or not.
Can I renew short term health insurance?
The rules are constantly changing, but it appears that the maximum amount of time you're allowed to renew short term health insurance is 36 months. Still, there are some policies that will have much shorter renewal periods and maximums.
How does short term health insurance work?
Short term health insurance works by providing clients with access to temporary insurance that can cover gaps. These policies are used by people who have gaps in current coverage and don't want to risk not having any form of health insurance protection.
How to choose short term health insurance?
To choose the best short term health insurance, it's very important to compare the market. Make sure to get quotes for a few different policies and compare the coverage that you're offered from each provider. You should also compare the reputation of each provider.
What companies offer short term health insurance?
There are tons of different health insurance companies that offer short term insurance. You can find some of them on our site. You're spoiled for choice if you want short term insurance. Some of these companies even offer no exam life insurance.
What is considered short term health insurance?
Short term health insurance is basically any insurance that lasts up to 36 months in the United States. It's a temporary insurance plan that is bought for a specific amount of time.
What is the best short term health insurance plan?
The best short term health insurance plan will depend on your policy. You should always compare different quotes and coverage levels before you make any decisions.
How to find options for short term medical insurances?
You can use our site, or you can use Google search to find more short term medical insurance providers. There are plenty of ways to compare different quotes. You can even ask your current or previous insurer. If you're wanting something different than traditional health insurance then there are cost sharing companies. For example get a Medishare quote and compare it to the typical insurance premium.
Are short term health insurance premiums tax deductible?
In some cases, short term health insurance premiums do appear to be tax deductible. But this will depend on certain circumstances. It's important to check with an accountant to verify.
Can I buy short term health insurance for a month?
It appears that you can purchase short term health insurance for as little as 30 days, but the laws around this are constantly changing — it's important to check with an insurer to see if it's possible.
Can short term health insurance drop you?
If you break the terms of the contract they can most likely drop you — this tends to be the case with any form of insurance.
What does COB stand for in medical insurance terms?
COB stands for coordination of benefits. Basically, this is a process in which an insurance provider will assess if they should be primarily liable for a medical claim. If you're insured by multiple insurance providers, they'll have to determine who is the party that is primarily responsible, and who is the secondary insurer.
What is ACA in medical insurance terms?
ACA stands for Affordable Care Act. It's a law that was passed under Obama's administration that attempts to make health insurance more affordable and more accessible to Americans.
Short Term Health Insurance Policy FAQ
If you have questions about short term health insurance policies, this is the section for you. Take a look at some of the common questions we receive.
Does short term health insurance cover Obamacare?
Short term health insurance and Obamacare are two entirely different things. They should not be confused as being under the same umbrella.
Does short term health insurance cover preexisting conditions?
Short term health insurance doesn't have to cover preexisting conditions. For this reason, it normally doesn't. You'll need to check the specifications of your particular plan to see what is covered.
Does short term health insurance cover prescriptions?
You can find some short term health insurance coverage that covers subscriptions, but the majority of them won't. If you want to get a short term plan that covers this, make sure to check if your prospective plan is eligible.
Can a short term health insurance refuse to cover pregnancy?
This is a tricky area of the law, as many insurance providers are not allowed to refuse you coverage if you're pregnant. But it appears that some short term insurance plans are allowed to not cover pregnancy.
What does short term medical insurance cover?
This varies significantly depending on the plan that you're looking to purchase. You should always look at what a policy covers before you determine if it's the right plan for you. For example some plans may cover vision for things like contact lenses and then some plans won't cover this at all.
Does short term medical insurance count as creditable coverage?
No, unfortunately your short term health insurance plan will not be considered to be creditable coverage. If you want to get creditable coverage, you'll need to look at more traditional plans.
Does short term health insurance cover pregnancy?
It does not have to cover pregnancy in some cases. For this reason, you need to open with your insurer provider and ask them if their plans cover pregnancy or not.
Does short term health insurance cover dentistry?
Short term coverage is not the same as traditional coverage, for this reason you may find that there are quite a few items that aren't included. Dentistry is sometimes not included in short term health insurance policies.
Does short term health insurance cover rehab?
This will depend on your policy and its stipulations. In some cases, the coverage might not offer rehab — or there may be a spending limit on the amount of money you're offered for rehab.
Does short term health insurance cover checkups?
In most cases, you'll find that short term health insurance does not cover things like checkups. They don't have to provide the same level of coverage that you find with other traditional providers.
Do short term health insurance cover out of state travel?
You need to ask your insurance provider if your policy covers this. If you're leaving the country, you can always purchase the best travel health insurance for your trip abroad — these plans can often be quite low.
Other Short Term Health Insurance FAQ
There are other short term health insurance questions that are often asked by consumers. You can find them here!
Are any short term medical insurances ACA compliant?
Unfortunately, short term medical insurance is not ACA compliant. This is because these insurance plans don't have to abide by the same rules or offer the same level of coverage.
Can I get short term medical insurance while pregnant?
Some short term medical insurance providers will not cover pregnancy. Fortunately, you can typically get normal insurance if you're pregnant with a child. Make sure to explore all options.
Does Cigna have short term medical insurance?
Cigna does not appear to offer short term health insurance, but this might not be the case — they may use a different terminology to describe short term products. If you want to find out, make sure to contact them directly.
How long do short term medical insurance plans last?
This will depend on the short term insurance plan that you purchase. In most cases, they won't be able to last more than 36 months. You should always consider the length of the policy before you purchase insurance.
Does Blue Cross have short term health insurance?
Some reginal Blue Cross teams may be willing to offer short-term health insurance to US residents. Make sure to get in contact with a team member to discuss your options. Blue Cross also offers medicare supplement plans.
Does Florida health department accept short term insurance plans?
You will need to contact the Florida health department to ask if they're willing to accept short term health insurance plans.
Does Kaiser offer short term health insurance?
It appears that Kaiser does not currently offer short term health insurance plans to consumers. Make sure to check with them regularly to see if they begin offering short term insurance.
Does Ohio Health accept short term health insurance?
If you want to find out if Ohio Health is willing to accept short term insurance, it's always best to contact them directly for the most relevant information.
Does short term health insurance exempt you from fine?
You will need to ask officials directly if you are able to exempt yourself from a fine. In some cases, you can use the hardship exemption to exempt yourself from a fine.
Does short term health insurance meet ACA requirements?
No, short term health insurance does not meet ACA requirements because it doesn't provide the right amount of coverage. Short term health insurance plans don't have to play by the same rules.
Does Assurant offer short term health insurance?
It appears that Assurant does offer short term health insurance plans to its consumers. You can ask about particular coverage levels directly from the insurance provider.
Can I purchase a temporary health insurance for my child?
There appear to be temporary health insurance plans for children if you're looking for coverage. But there are also government programs that help provide children with coverage as well, so these are worth considering.
How long does it take to get temporary health insurance?
This will depend on the insurance provider that you work with. In some cases, you may be able to get coverage within a day or two of apply for a plan — but there may be a grace period where you're not covered.
How to get quick temporary health insurance?
If you want to get quick temporary health insurance, it's essential to go online and look at various policies. You can typically apply directly through the internet if you want quick coverage.
How to get temporary health insurance between jobs?
You can head online and search for temporary health insurance plans — there are plenty of insurance providers that offer these types of plans. It's also worth asking your old insurance company if they provide temporary coverage.
Is short term medical insurance minimum essential coverage?
It's normally not considered essential coverage because it doesn't provide you with the same amount of coverage that you find in many traditional health insurance plans.
What insurance plan type is short term medical?
Short term medical insurance is effectively a temporary insurance plan that provides users with access to health insurance over a set time frame.
What is the difference between short-term medical insurance and long term?
Short term medical insurance only provides you with coverage for a temporary time — normally the maximum is 36 months. It also typically offers less coverage. Long-term plans offer more extensive coverage over longer periods of time.
Can I get temporary health insurance?
Most people can get temporary insurance for up to 36 months, but you should ask a provider if you're eligible for short-term health insurance.
Can you cancel short term health insurance?
This will depend on the length of the plan and the insurance provider that you're working with. In some cases, insurance providers will also give you a grace period that allows you to cancel for a full refund within a certain amount of days.