Short term medical insurance plans are trending right now. Find out why.
In 2018, the Trump administration announced a new type of health insurance plan known as short term medical insurance. The notion was slated to address some of the perceived issues Americans were facing when deciding between health insurance plans available on the health insurance marketplace, including the cost of premiums and missed open enrollment resulting in risky periods of being uninsured.
Affordable and Available – But.
While these short term medical insurance plans may seem exceedingly affordable and available in an instant, there are some drawbacks to consider. As well, these plans do not align with the protections under Obamacare plans – which are mandated to provide coverage for a wide range of services and cannot exclude applicants due to pre-existing conditions.
What is Short Term Medical Insurance?
Short term medical insurance plans are designed to be, of course, short in duration and meant for those experiencing difficulty obtaining a full insurance plan for one reason or another. At the outset, these plans were to provide coverage to enrollees for a period of just three months. However, many states have expanded the rules to allow coverage up to 364 days, renewable up to 36 months.
Lower Cost Limited Coverage Health Insurance Coverage
They do not have to adhere to ACA standards
Unlike Medicaid, short term medical insurance plans are administered by private sector health insurance companies. Also, these plans need not comply with the mandates of the Affordable Care Act, so the plans may not necessarily cover the gamut of health-related services an enrollee may need nor include some health care benefits you find you actually need. This coverage is not “minimum essential coverage” as defined by the ACA. Some folks, however, may benefit from the reduced coverage and lower costs of these plans depending on their unique situation. As always, it pays to read the fine print – especially when it comes to your healthcare.
Short term health insurance plans provide fast and flexible health coverage for a temporary time.
As early as the next day after you apply in many cases.
No. You can apply for Short Term or Temporary health insurance at any time. This is different from Affordable Care Act (ACA) coverage, also known as Obamacare, which you can buy only during Open Enrollment each year or during a qualified Special Enrollment time.
No. Short Term plans are not ACA, or Obamacare, health plans. While both ACA and Short Term health insurance plans cover major health events in your life, there are important differences.
ACA health plans are guaranteed issue, meaning you cannot be denied coverage based on preexisting conditions. Also, ACA health plans are required to cover 10 essential health benefits:
- Doctor visits for illness and injury and other outpatient care (ambulatory services)
- Emergency services
- Hospitalization
- Maternity and newborn care
- Mental health and substance use disorder services
- Prescription drug coverage
- Rehabilitative and habilitative services and devices (relearning to walk after a stroke and improving ability to speak without an impediment)
- Laboratory tests and services
- Preventive and wellness care
- Pediatric services (including both oral care and vision care)
In contrast, Short Term health insurance is not required to cover all of these benefits, so plans can vary in what they cover. Also, Short-Term insurance plans typically do not cover preexisting medical conditions. You must apply and answer a series of medical questions to determine your eligibility for these plans.
Yes, in many cases, you can cover spouses and dependents with Short Term insurance. Note: State variations do apply. In some states, you may not be able to include spouses and dependents. And in states where you can cover them, all family members will be subject to the same series of medical questions to determine if they are eligible for the plan.
Short-Term health insurance is not “minimum essential coverage” as defined by the ACA. As of January 1, 2019, there is no federal tax penalty for not having minimum essential coverage.
However, tax penalties may still vary at the state level. Consult your tax advisor for more information.
Short Term medical insurance typically does not cover preexisting medical conditions. The definition of preexisting condition varies by state, but, in general, Short Term health insurance plans exclude coverage for conditions that have been diagnosed or treated within the previous 2 years.
If you have an existing medical condition, you may want to find out whether you can extend your current insurance. Employer-sponsored insurance may be extended under COBRA (or a similar state program).
Yes. You can make some choices that can help you find the best Short Term health insurance costs for your situation:
Choose a higher deductible. The deductible is what you have to pay of the expenses covered by your insurance plan before the insurance will pay anything. If you choose a higher deductible, meaning you pay more before the insurance starts paying, you can reduce your premium.
Pay your entire premium up front. In select states with some Short Term plans, if you can pay the total premium for the amount of time you want to be covered, you can save 18% by paying that in one lump sum.
Choose a plan with fewer benefits. Not all Short Term health insurance plans are the same. You will find different levels of coverage available with different benefits for different prices. For example, you can control if your plan includes copays, a fixed dollar amount you pay, for a doctor’s office visit or if you want to include prescription drug coverage.
Stay in network. Picking a health care provider or a specialist that is in the extensive UnitedHealthcare network may save you money because the providers agree to provide quality care at reduced rates.
No. Because temporary insurance plans are not minimum essential coverage as defined by the ACA, you are not eligible for tax subsidies to help pay for them. However, generally, Short Term health insurance plans cost less than ACA health plans.
A federal rule regulates Short Term Limited Duration Insurance to terms of less than 12 months (364 days). However, term lengths vary by state. Check your state’s plan brochure for details.
No problem. You can drop your coverage at any time without penalty.
The federal rule regulating Short-Term plans allows for a 36-month maximum duration of renewable coverage. Some states will allow only Short-Term health insurance plans issued for a specific period of time that cannot be extended.
In other states, you can apply for back-to-back plans that together give you coverage for more than a year.
Finally, in some states, when your term is ending, you can apply for a new Short Term plan.3 Remember, though, this is not an extension of your first plan. Any illness or condition you develop while covered under your first plan would be considered a preexisting condition for the new plan.
Yes, most likely you can. UnitedHealthcare offers one of the largest networks in the U.S. With access to nearly 1.5 million physicians and other health care professionals, and approximately 7,000 hospitals and other medical facilities,2 chances are your current doctor is already a part of our nationwide network.
Health care professionals in our network agree to provide you quality care at lower fees.
Not necessarily. Your deductible is what you have to pay of the expenses covered by your insurance plan before the insurance will pay anything. Short Term Medical insurance plans underwritten by Golden Rule Insurance Company allow you to choose the deductible you’re most comfortable with from several options.
With some Short Term plans, if your regular in-network doctor’s visit is covered on the plan and your doctor offers telehealth services, you can take advantage of that service at network negotiated lower rates. Your plan’s deductible and coinsurance rates apply in that case.
Certain plans offer a Virtual Care rider for an additional cost that will provide unlimited virtual visits with board-certified doctors 24/7 at no additional consultation fee. This can be a to good option if you need quick care.
Sometimes. Prescription coverage is available with some temporary insurance plans. Check specific plans for details.
Sometimes. Limited preventive care coverage is available with some temporary insurance plans. Check specific plans for details.
No. You are under no obligation when using our site. After submitting your application, you may cancel it at any time during the underwriting process.
Note, however, that an application fee may apply in some cases.
No. Some health plans make you select a primary care provider or primary care physician (PCP) to be the main health care professional who takes care of you. With Short Term Medical insurance plans,4 you can go to any qualified health care provider you choose at any time. Note: Some plans may require you to choose a provider that is in the health plan’s network to get your benefits.
No. A referral is a type of preapproval some health plans require where your primary care provider (PCP) must refer you to another doctor or for a specific service for that visit or service to be covered by the plan. With Short Term Medical insurance plans,4 you can go directly to any specialist of your choice without needing a referral. Note: Some plans may require you to stay with a specialist who is in the health plan’s network to get your benefits.
Is short-term health insurance worth it?
Short-term health insurance can be a good option for individuals who are healthy and do not generally require health services or have regular prescription needs. Short-term health insurance is often worth it for those who want a health plan in case of emergency or need immediate coverage.
What Do They Typical Cover?
Short-term medical insurance typically provides some level of coverage for preventive care, doctor visits, urgent care, and emergency care. There may also be coverage for prescriptions . Some plans also offer cost savings for seeing in-network providers. Make sure to read the “exclusions and limitations” information before buying any plan.
Is a Short-Term Health Insurance Plan the Right Health Insurance Choice for You?
Short Term or Temporary health insurance plans may make sense if you are:
- Young adults rolling off your parent’s insurance
- Recent college graduates
- Veterans transitioning out of the service on their way to school or a new job
- Those who find themselves in between jobs
- Without health insurance, have missed Open Enrollment and do not have a qualifying event for Special Enrollment
- Waiting for your Affordable Care Act (ACA) coverage to begin
- Those transitioning out of a welfare program
- Waiting for benefits to begin at a new job
- Retirees who aren’t yet eligible for Medicare and are waiting for Medicare
- Needing a temporary alternative to COBRA insurance
- Losing coverage following a divorce
- Those who have COBRA but find that it is too expensive to continue
- Under 65 and in good health
If one or more of these situations describes your current situation, and you find yourself temporarily lacking health care coverage, choosing a Short-Term health insurance plan may be just the security you need to get you to that next stage of your life. A number of plans are available and an licensed Fiorella Insurance Agent can help you find a plan from the insurance company that makes the best sense for you and your budget.
Short Term Coverage May Not Include Everything
Some Pros and Cons of Short Term Health Insurance
First, the Cons
One of the biggest criticisms of short term medical insurance plans, which is not ACA compliant, is the reduction in coverage found in many of these policies available from various insurance companies. Coined as “junk insurance” by opponents of the initiative, short term health insurance plans are not all-inclusive and do not offer comprehensive coverage. Some coverage areas you may not find in your plan include:
1. Behavioral Health
Obamacare plans are mandated by the Affordable Care Act to provide coverage for behavioral health services, whereas short term insurance plans are not. Meaning that someone with a short term plan will likely not be covered for mental health services, psychiatric medications, treatment for substance use disorders, detoxification treatment, or counseling.
2. Pre-Existing Conditions
One of the hallmarks of the Affordable Care Act (ACA) was the provision that health insurance providers could no longer exclude those applicants with pre-existing conditions. This change meant that many folks with chronic illnesses or other major medical issues would be able to access reasonably affordable health insurance coverage for their medical care. Under a short term medical insurance plan, insurance companies can (and will) decline coverage for an applicant with a pre-existing condition. They provide limited benefits with generally much higher costs. Some states take this a step further and allow short term insurance providers to exclude claims for coverage for an undiagnosed condition that came about prior to purchase of the short term health insurance plan – meaning enrollees can be denied coverage for a condition they didn’t even know they had at the time.
3. Maternity Care & General Doctor Visits
Short term medical insurance plans generally do not cover any services relating to maternity, prenatal, childbirth or antenatal care — unlike Obamacare plans, which are required to cover these services. Also, these short term health insurance plans may contain a limitation on the number of doctor visits a policyholder may have within a certain period of time, after which the enrollee will be responsible for the full cost of the service.
4. Prescription Drug Coverage
Another reason why reading the fine print is so vital when it comes to short term medical insurance plans: many do not cover prescription drugs which many may need for long term conditions they suffer from. For anyone who takes regular medication, this could prove catastrophic under this type of plan.
Reasons to Select This Type of Plan
Now the Pros
Despite the reduction in coverage from Obamacare ACA Compliant health insurance plans, there are some benefits to selecting a short term health insurance plan, including any of the following:
- Sudden loss of coverage: Sudden job loss, or time spent in between jobs, may be one reason to select a short term plan, especially for a relatively healthy person who does not necessarily need broad coverage. Keep in mind, however, Obamacare plans allow for a special enrollment period for anyone facing sudden job loss – so this may be an option too.
- Special activities: If you are an uninsured person and need proof of insurance quickly – perhaps to participate in a special activity or event – a short term policy may be a good option (assuming you aren’t worried about any major injury!). Another scenario may arise where you have a side hustle or are self employed and need short term health insurance to cover you.
- Gap period before Medicare: Again, relatively healthy individuals who are nearing the eligibility age for Medicare may wish to elect a short term plan to bridge the gap.
Short term medical insurance plans are attractive as they generally advertise a much lower cost than an Obamacare plan. Of course, you get what you pay for, as the saying goes.
A Fiorella Insurance broker or agent can help you figure out what information you’ll need, what documents to submit if you need to, and decide which health insurance plan is best for you and your family.
Buyers Beware
Short term medical insurance plans are not without risk – and major potential risk for some. If a medical emergency happens while under a short term plan, it, in all likelihood will not be covered and the entire bill will be owed. As well, anyone with a chronic condition will likely not have access to coverage, even for routine care of this condition – resulting in a hefty medical bill. As well, short term plans generally renew every couple of months, meaning an injury sustained during the previous policy would not be covered in the next (renewed) policy under pre-existing condition exclusions.
A Fiorella Insurance Agent can help you choose insurance that’s right for you.
If you are considering a short term medical insurance plan, contact a benefits advisor at Fiorella Insurance right away — (772) 283-0003. We will work to find a plan that meets (all of) your healthcare needs!
