Short-term health insurance (STM) plans are meant to be used when you have a temporary insurance coverage gap in your current health insurance. This kind of plan provides you with temporary health coverage during a lapse in your current plan, protecting you from expensive medical bills that arise from unexpected health changes or emergencies. Short-term health plans offer a lesser range of coverage than long-term do. On the other hand, they give emergency coverage for everyone who is not ready to purchase an ACA plan or for everyone who needs temporary coverage before their long-term insurance becomes active.
You are eligible for short-term health insurance if you:
- Change jobs
- Lose employer-sponsored coverage
- Are waiting for the annual Open Enrollment Period
- Attend out-of-state college
Short-term health insurance plans are limited in duration and you will stop receiving benefits when the plan expires. Plan duration and whether you can renew or buy a new plan after plan expiration depends on the plan you choose and the laws in your state. After a short-term plan expires, you must reapply to receive further benefits. If you are accepted for an additional term under a short-term health insurance plan, the plan’s deductible and other amounts reset so that amounts paid under the initial plan are ignored. Similarly, whether you have pre-existing conditions will generally be determined anew as of your approval under the new application. State laws limit the number of times a short-term insurance policy may be renewed and may restrict your ability to apply for more than one consecutive short-term health insurance plan. Have in mind that you can cancel a short-term health insurance plan at any time. Additionally, your plan will cancel automatically after the selected coverage period ends.
Short-term health insurance plans are generally less expensive than qualified health plans under the ACA but do not offer the same level of coverage. Short-term health insurance plans are intended for people who do not want or cannot afford major medical insurance or who want a temporary form of limited coverage before they obtain major medical health insurance. Among other limitations and exclusions, short-term health insurance plans generally do not cover preexisting conditions or the minimum essential coverage of the ACA (benefits such as mental healthcare, pregnancy, and childbirth, preventive care, etc.).
COVERAGE
Short-term medical insurance is meant to cover hospital room and board, emergency health situations, inpatient doctor visits, and other unexpected medical needs not part of pre-existing conditions. Confusion about how the coverage works and existing exclusions create a lot of claim denials. So it is important to know that these are emergency plans with limitations for preventive care and high deductibles.
Short-term health providers will tailor different types of packages in varying price ranges. There could be found policies that offer more coverage than others. You do not need to settle for a bare minimum plan, so be sure and ask about preventive care add-ons or other coverage to get the best quotes. It is worth comparing a few options before you make a decision.
Short-term health plans have many exclusions from coverage, including no coverage for pre-existing conditions. Exclusions that demonstrate the limitations found in many short-term health plans include these statistics:
- 43% do not cover mental health services
- 62% do not cover substance abuse
- 71% do not cover outpatient prescription drugs
- No short-term health plans cover maternity care
- No short-term health plans cover wellness visit
SHORT-TERM HEALTH INSURANCE COSTS
The average cost of short-term health insurance for a single person is $124 a month compared to $456 for an unsubsidized ACA-compliant plan. There are plans with coverage more suited to the concept of catastrophic plans (due to their high deductibles) for as low as $60 a month. It can be confusing due to the lack of consistency in plan coverages, but it is recommended to shop and compare the options line by line.