What is a short-term health insurance plan?
A short-term health insurance plan is just that — coverage for a short period of time, usually in increments of 30 days to three months. This coverage is designed to provide temporary healthcare insurance during unexpected coverage gaps, such as missing the open enrollment period, or if you’re in between jobs.
While short-term plans may seem more affordable than typical medical coverage, the coverage that is offered is much more limited and can end up costing the enrollee much more in the long run. This is because short-term plans do not meet the minimum essential coverage required of medical plans by the Affordable Care Act (ACA). Short-term plans generally do not cover things like pre-existing conditions, annual preventive care, and maternity coverage.
What does a short-term plan cover?
Many short-term plans will cover hospitalization, labs, x-rays, ER visits, and surgery — services that are not considered routine. Only some will cover office visits with a copay and many offer a prescription discount card (versus an actual prescription drug plan).
What does a short-term plan not cover?
- Pre-existing conditions
- Preventive care
- Routine maternity care
How do I know if a short-term plan is right for me?
Short-term plans are intended for people who are in good health and are using the plans as a bridge between major medical coverage. It is mainly for catastrophic coverage and not intended for those who have ongoing or complex medical requirements. Some examples of people who may benefit from a short-term plan are those who may have missed the annual Open Enrollment periods for ACA coverage, or who have a gap between major medical insurance plans.
It is important to note that, as an example, if you lose your job and need coverage that is more affordable than COBRA, or are a dependent who has aged out of their parent’s plan, these are considered Qualifying Life Events and you are allowed to enroll in an ACA plan outside of open enrollment. For most people, with the support of tax credits and more comprehensive options, enrollment on the Exchange (healthcare.gov or your State-Based Exchange) is a better solution than purchasing a short-term plan.
Do short-term plans provide the same coverage as plans sold on Healthcare.gov or your State-Based Exchange?
No. By law, Affordable Care Act plans offered on Healthcare.gov or through your State-Based Exchange must offer “10 essential health benefits,” while short-term plans are not required to offer any.
Today, there are 10 categories of essential benefits that you can count on with ACA plans, no matter which health insurance provider you choose. They include the following services:
- Outpatient care
- Emergency services
- Pregnancy, maternity, and newborn care (both before and after birth)
- Mental health and substance use disorder services, including behavioral health treatment
- Prescription drugs
- Rehabilitative and habilitative services and devices
- Laboratory services
- Preventive and wellness services and chronic disease management
- Pediatric services, including oral and vision care
I have a pre-existing condition. Can I get a short-term plan?
Pre-existing conditions (those generally present within the past five years) are usually not covered by short-term plans, and some conditions will cause you to be declined for coverage. ACA plans, on the other hand, will not deny you coverage because of a pre-existing condition or charge higher premiums. The Kaiser Family Foundation “estimated using 2015 data from the Centers for Disease Control and Prevention that 27% of adults age 18-64 (52 million people) have a pre-existing condition that would have led to a denial of insurance in the individual market before the ACA.”