Short-term health insurance offers temporary coverage to fill a gap between other health plans. It is not comprehensive coverage and is not regulated by the Affordable Care Act (ACA), mental health parity rules, the No Surprises Act, or other federal health insurance rules. This type of insurance is designed to provide temporary medical coverage when you are between health plans, outside enrollment periods, and need some coverage in case of an emergency. However, to get the most out of a short-term health plan, you need to understand how they work, what they cost, and what they cover.
### Key Takeaways * Short-term health insurance provides a temporary safety net for individuals between health plans or outside enrollment periods. * These plans typically cover inpatient and emergency care, surgeries, outpatient services, lab work, and imaging, but they do not cover pre-existing conditions. * Short-term health insurance is not regulated by the ACA and does not have to comply with federal health insurance rules, making it less comprehensive. * The availability and regulations of short-term health insurance vary by state, so it is important to check state-specific rules. * Short-term health insurance can be useful in situations such as missing open enrollment, transitioning between jobs, or aging out of parental coverage. ## Understanding Short-term Health Insurance ### Definition and Purpose Short-term health insurance is a type of health plan that provides temporary medical coverage when you are between health plans, outside enrollment periods, or need coverage in case of an emergency. **It is not comprehensive coverage** and is not regulated by the Affordable Care Act (ACA) or other federal health insurance rules. These plans are designed to cover unexpected medical events that are not linked to a pre-existing condition. ### Eligibility Criteria Eligibility for short-term health insurance varies by provider, but generally, you must be under 65 years old and in relatively good health. These plans often require you to answer a series of health-related questions to determine your eligibility. It's important to note that short-term health insurance is not suitable for everyone, especially those with pre-existing conditions. ### Duration of Coverage The duration of coverage for short-term health insurance can range from a few months to just under a year, depending on the state regulations and the specific plan you choose. Some states allow you to renew your short-term plan, while others do not. This makes it crucial to understand your state's rules and the specific terms of the plan you are considering. > If you want to understand short-term health insurance, a great resource is our free, downloadable ebook, 3 steps to understanding short-term health insurance. ## Coverage and Benefits of Short-term Health Insurance ### Inpatient and Emergency Care Short-term health insurance policies are designed to cover at least some of the cost of unexpected medical events that are not linked to a pre-existing condition. These plans generally provide coverage for inpatient and emergency care, surgeries, and various outpatient services, lab work, and imaging. ### Outpatient Services [Short-term medical insurance typically provides some level of coverage for preventive care, doctor visits, urgent care, and emergency care.](https://www.cigna.com/knowledge-center/what-is-short-term-health-insurance) There may also be coverage for lab tests and imaging, although the extent of this coverage can vary significantly between plans. ### Limitations and Exclusions Short-term health insurance is not comprehensive coverage and is not regulated by the Affordable Care Act, mental health parity rules, No Surprises Act, or other federal health insurance rules. **It is important to note that these plans often come with significant limitations and exclusions.** For example, they may not cover pre-existing conditions, mental health services, or prescription drugs. Additionally, the coverage limits can be quite low, and there may be high out-of-pocket costs for certain services. > Short-term health insurance offers temporary coverage to fill a gap between other health plans. However, it is not an excepted benefit under the ACA and is exempt from federal insurance rules and regulations specifically because it is not considered individual health insurance. ## Cost of Short-term Health Insurance ### Premiums and Deductibles The monthly premiums for short-term health insurance vary considerably depending on where you live, your age, and the insurance company that’s offering the coverage. Depending on the circumstances, they can start at well under $100/month. **Although premium subsidies are not available for short-term policies**, the plans do tend to be considerably less expensive than ACA-compliant major medical plans if you’re not eligible for a premium subsidy. ### Out-of-pocket Costs If you’re considering temporary health insurance, typical upfront costs include: * Premiums * Deductibles * Copayments * Coinsurance It’s important to understand that short-term healthcare plans generally rely on post-claims underwriting, which means they’ll go back and take a closer look at your medical history if and when you experience an injury or illness that results in a medical claim, to ensure that the condition was not pre-existing. ### Comparing Costs with ACA Plans Short-term health insurance plans are generally less expensive than ACA-compliant plans, especially if you are not eligible for a premium subsidy. We found [costs as low as about $100 a month for barebones coverage to over $200 a month for coverage with prescription drug coverage](https://www.forbes.com/advisor/health-insurance/best-short-term-health-insurance/). However, it’s crucial to compare the benefits and limitations of each type of plan to determine which is the best fit for your needs. ## State Regulations and Availability ### State-specific Rules State regulations for short-term health insurance vary widely. In some states, these plans are [banned outright](https://www.cms.gov/newsroom/fact-sheets/short-term-limited-duration-insurance-and-independent-noncoordinated-excepted-benefits-coverage-cms), while in others, they are subject to strict regulations that may deter insurers from offering them. This means that the availability of short-term plans can fluctuate from year to year based on evolving state regulations and insurer business practices. ### Availability by State Short-term health insurance plans are available in many states, but not all. Here is a list of states where you cannot buy short-term health plans in 2024: * California * Colorado * Connecticut * District of Columbia * Hawaii * Maine * Massachusetts * Minnesota * New York * New Hampshire * New Jersey * New Mexico * Rhode Island * Vermont * Washington ### Impact of State Regulations State regulations can significantly impact the design, availability, term length, and additional terms of short-term health insurance policies. These policies often come with exclusions, limitations, and terms under which they may be continued or discontinued. For detailed information on costs and coverage, it is advisable to consult with an insurance agent or the insurance company directly. > The availability of short-term plans does sometimes fluctuate from one year to the next in a given state, due to insurer business practices and evolving state regulations. ## Situations Where Short-term Health Insurance is Useful ### Between Jobs Short-term health insurance can be a **lifesaver** when you're between jobs. If you have recently lost or left your job, you might find yourself without health coverage. In such cases, short-term plans can provide the necessary coverage until you secure a new job with health benefits. ### Missed Open Enrollment
If you missed the open enrollment period for a traditional health plan, short-term health insurance can be a viable option. This type of insurance can offer temporary coverage until the next enrollment period, ensuring you are not left without any health insurance. ### Aging Out of Parental Coverage Turning 26 and aging out of your parents' health plan can leave you in a coverage gap. Short-term health insurance can bridge this gap, providing you with the necessary coverage until you find a more permanent solution. > Short-term coverage may be helpful in limited situations. For example, if you're between plans, don't qualify for a special enrollment period, and know you'll need coverage for a short duration, this type of insurance can be a practical choice. ## Pros and Cons of Short-term Health Insurance ### Advantages Short-term health insurance is designed to fill [short-term gaps](https://www.ehealthinsurance.com/resources/short-term/short-term-health-plan-what-is-it-and-what-does-it-cover) in coverage, making it a flexible option for those in need of temporary insurance. You can cancel coverage whenever you'd like without penalties, and you can typically choose a plan that covers you up to a year, if needed. Many different plan designs are available, depending on the insurance carrier. ### Disadvantages While short-term health insurance can be useful, it is not comprehensive coverage and is not regulated by the Affordable Care Act (ACA). This means it may not cover essential health benefits, mental health services, or pre-existing conditions. Other costs may apply depending on what type of coverage you buy, so it's crucial to read all plan information carefully before choosing. ### Comparing with Long-term Plans When comparing short-term health insurance with long-term plans, it's important to consider the scope of coverage. Long-term plans typically offer more comprehensive benefits and are regulated by the ACA, ensuring coverage for essential health benefits. In contrast, short-term plans are often referred to as temporary insurance and are considered coverage for special situations. > For the right situation, short-term insurance plans can provide fast, flexible, temporary health insurance coverage that fits your needs. ## How to Choose a Short-term Health Insurance Plan Choosing the right short-term health insurance plan involves several important steps to ensure it meets your specific needs and circumstances. **[Understanding these steps](https://www.valuepenguin.com/short-term-health-insurance) can help you make an informed decision.** ## Conclusion Short-term health insurance serves as a temporary solution for individuals who find themselves between health plans or in need of immediate coverage outside of traditional enrollment periods. While it offers a safety net for unexpected medical events, it is essential to understand its limitations, including the lack of comprehensive coverage and exemption from federal health insurance regulations. This type of insurance can be particularly useful for those who missed open enrollment, are transitioning between jobs, or have aged out of their parents' plans. However, it is not a long-term solution and should be used with a clear understanding of what it does and does not cover. By being informed about the specifics of short-term health insurance, individuals can make better decisions to bridge gaps in their healthcare coverage effectively. ## Frequently Asked Questions ### What is short-term health insurance? Short-term health insurance is a type of health plan that provides temporary medical coverage when you are between health plans, outside enrollment periods, and need some coverage in case of an emergency. It is not comprehensive coverage and is not regulated by the Affordable Care Act (ACA) or other federal health insurance rules. ### What does short-term health insurance cover? Short-term health insurance policies are designed to cover at least some of the cost of unexpected medical events that are not linked to a pre-existing condition. The plans generally provide coverage for inpatient and emergency care, surgeries, various outpatient services, lab work, and imaging. ### Is short-term health insurance a good idea? Short-term health insurance may not be ideal for the long term, but it can be useful in certain situations, such as when you missed open enrollment for a traditional health plan, lost or left your job, or turned 26 and transitioned off your parents’ health plan. ### How long does short-term health insurance coverage last? Short-term health insurance coverage can last from 1 month to nearly 3 years, depending on the plan and the state regulations. It is designed to provide temporary coverage until you can secure a more permanent health insurance solution. ### What are the limitations and exclusions of short-term health insurance? Short-term health insurance plans often have limitations and exclusions, such as not covering pre-existing conditions, mental health services, or preventive care. They may also have caps on the amount they will pay for certain services. ### How does the cost of short-term health insurance compare to ACA plans? Short-term health insurance typically has lower premiums compared to ACA-compliant plans. However, they also come with higher out-of-pocket costs and may not provide the same level of coverage and protections as ACA plans.
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