The Facts About Short-Term Health Insurance
Health insurance is meant to make medical care more affordable. But what happens when you lose your health insurance coverage? What can you do if you miss the enrollment window and need a policy right now? If you’re worried about finding health insurance, there is a stopgap option that could cover your needs.
It’s called short-term health insurance. These nontraditional health insurance policies give you the coverage you need for a limited amount of time. A short-term health insurance policy could help with basic healthcare costs, allow you to get the care you need, and keep you covered for a few months.
And short-term health insurance plans allow you to enroll at any time. You don’t have to wait for open enrollment.
However, short-term health insurance doesn’t offer the same coverage as traditional health insurance policies. Short-term health insurance is different, and these types of plans aren’t allowed in every state. If you’re trying to decide whether short-term health insurance is a smart choice for you, here are the facts about these unique policies.
Short-Term Health Insurance is Only Temporary
The biggest difference between traditional health insurance and short-term health insurance is in the purpose of the policies. Traditional health insurance covers you for the long-term. Short-term health insurance only covers you for 11 months or less.
Short-term health insurance provides temporary medical coverage. However, you can only use short-term health insurance for certain situations and certain medical needs. It isn’t meant to be used for long-term coverage, and there are limitations on many policies and plans.
The coverage of a short-term health insurance policy also varies from plan to plan and insurance company to insurance company. Typically, a short-term health insurance policy will offer limited coverage only for unexpected illness, an accident, or serious injuries. Additionally, these types of policies aren’t required to follow the Affordable Care Act (ACA) guidelines for coverage – which means they don’t have to abide by any rules when it comes to the coverage they provide.
That means a short-term health insurance policy won’t cover preventative care, like annual physicals or checkups. Routine healthcare may not be covered at all.
Anyone Can Apply for Short-Term Health Insurance
If you need urgent healthcare coverage, a short-term health insurance plan is a great option. Absolutely anyone can apply for these policies – if you need one, you can get one, as long as you’re approved.
However, there are limitations, requirements, and costs associated with securing a short-term health insurance plan. And short-term health insurance is really only meant to be used in the following situations:
- Failing to enroll in a health insurance plan during the annual open enrollment period.
- Being unable to qualify for special enrollment.
- A lapse in coverage.
- Starting a new job with a 30-, 60-, or 90-day waiting period before coverage begins.
- Older adults who are almost eligible to apply for Medicare.
- Situations that require proof of health insurance coverage, like students enrolling in college.
In situations like these, short-term health insurance can be very helpful. But it’s important to note that these types of policies are really only meant to be temporary coverage. If you can’t secure a long-term or traditional health insurance plan, you can rely on short-term health insurance for the time being.
Short-term health insurance can be a great option in a number of situations. It’s a great option for those who need coverage in a pinch. Just keep in mind that this type of health insurance is best for those who cannot get a traditional plan.
If you think short-term health insurance might be right for you, check to see if it’s available in your area. These short-term plans are not allowed in some states, and other states do place limitations on coverage and types of policies.
Short-Term Health Insurance is Helpful in Certain Situations
At times, short-term health insurance can be a smart financial move. In these cases, it can be hugely helpful if you’re facing a crisis or a lack of any health coverage.
What makes short-term health insurance a good choice? Here are some benefits of short-term policies:
- Secures coverage during periods of time when you’re without any insurance.
- Fills in with temporary coverage when you’re between traditional plans.
- You can cancel any time, without penalty.
- Coverage begins within 24 hours, in most cases.
- Can purchase anywhere from one month to 11 months of coverage.
- Coverage is flexible, and you can renew your policy multiple times.
Short-Term Health Insurance Comes With More Limitations
Short-term health insurance policies aren’t meant to be as comprehensive as traditional health insurance. So, there are typically more restrictions and limitations on these plans. As a result, this type of insurance isn’t always the best choice for some people.
Short-term health insurance offers small-scope coverage for a set amount of time. And it can come with drawbacks like:
- Significantly higher deductibles.
- Higher out-of-pocket costs.
- Limited or no coverage for preexisting conditions.
- Limited coverage for many medical procedures and services.
- A required medical questionnaire for new policyholders.
- No mandated or standardized coverage.
- Limited or lacking prescription drug coverage.
- Limits on renewing if you develop any medical conditions or illnesses.
Additionally, some people may not be able to qualify for – or rely on – short-term health insurance. Short-term insurance policies carry different levels of coverage, and they may not accept individuals with serious health needs.
If you fit into any of the following situations, short-term health insurance may not be a good idea for you:
- Live with a chronic health condition.
- Need preventative care, such as annual doctor’s visits or regular check-ups.
- Anyone who qualifies, or will qualify in the next 30 days, for special enrollment (such as turning 26 or getting married).
Could Short-Term Health Insurance Meet Your Needs?
In certain situations, short-term health insurance can be a great investment. It’s a way to protect your health – and your wallet – from unexpected health expenses. And it can be hugely helpful if you need urgent medical care during a time of unemployment or lost health insurance coverage.
But short-term health insurance can be beneficial in different ways for different people. So, if you’re interested in getting a short-term health insurance policy, it’s a good idea to do some research first. Search online to see if short-term policies are available in your area. Read company reviews, check out their coverage options, and compare prices.
And don’t forget to see if you can qualify for a short-term health insurance plan. You should see if insurers will accept you, and if there are added costs for any health conditions you currently live with. By doing this research before you choose a plan, you’ll be prepared to find a plan that suits your budget and your healthcare coverage needs.