Is short-term health insurance right for you?
Short-term health insurance often costs less than more comprehensive plans. It's an attractive option for people looking for temporary coverage if they aren't eligible for Marketplace subsidies or missed their enrollment window for ACA-compliant coverage.In some states, plans are sold in terms of up to 364 days of coverage. And some insurers allow their plans to be renewed for up to a total of 36 months. These are currently the upper limits allowed by the federal government.
Even while the more relaxed federal rules are in place, there are states that place more restrictive limits on plan durations. Some states do not allow short-term plans to be sold at all.Even in states that do not limit short-term plans beyond the federal minimum requirements, insurers can choose to offer plans that are non-renewable or that have shorter durations.
Is a Short-Term Plan Right for Me?
Although short-term health insurance can be a low-cost option, it isn’t right for everyone. You will need to understand what the plans will cover, and how long you will have that coverage.It's important to know that short-term health insurance plans do not have to follow the ACA's rules.For example, a short-term health insurance policy can place a cap on benefits. This limits the insurer’s potential losses if you get seriously ill while you're covered. If you get very sick and need a lot of medical care, that's expensive for the insurer.
Short-term plans also do not have to cover essential health benefits—that includes things like maternity care and mental health care. Many plans also do not include outpatient prescription drug coverage.If you have a medical condition, you should know that almost all short-term plans do not provide coverage for any pre-existing conditions.
Who Qualifies?
If an insurer thinks that you're a risk to cover, they can turn you down. On the other hand, if you're young, healthy, and are not seen as a risk, you might be able to get short-term health insurance.While it's a lower-cost option, you need to read all the fine print, understand how post-claims underwriting works, and know what the plan does and doesn't cover.
How to Buy a Short-term Plan
There are a few ways to buy a short-term health insurance plan:
• Buy a policy directly from a health insurance company.
• Use your own insurance agent (if you have one).
• Find a health insurance agent or broker through a National Association of Health Underwriters website.
• Use a non-governmental private online exchange (such as ehealthinsurance.com).
Can I Buy a Short-term Plan on the Exchange?
No, short-term health insurance is not sold on ACA health insurance exchanges such as HealthCare.gov, and ACA subsidies cannot be used with short-term health insurance.Short-term health plans are not considered minimum essential coverage. If you experience a qualifying event that would typically trigger a special enrollment period where you could get an ACA-compliant plan, you would not be able to do so if the rules require you to have had minimum essential coverage in place before the qualifying event.For example, even though the involuntary loss of coverage is a qualifying event that normally lets a person enroll in an ACA-compliant plan, the loss of a short-term plan does not.
Catastrophic Health Insurance Overview
Moving is another example. If you move from one area to another, it will not trigger a special enrollment period if you had coverage under a short-term plan before you moved.You must have had coverage under a plan that counts as minimum essential coverage beforehand to qualify for a special enrollment period that's triggered by your move.
Recap
Short-term health insurance only covers you for a limited time. It also does not cover a lot of services, including some essential care.The plans can be low-cost, but you might not be able to get covered. If a provider thinks that you have a high risk of needing health care services (which would cost them more money), they can turn you down or refuse to cover anything related to the medical conditions you have.