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On one hand, short-term health insurance is precisely what it sounds like: healthcare policies that provide coverage on a temporary or limited basis. But how do you know if and when a short-term policy may be right for you? Join the #TRN team as we explore the pros, cons, and how-tos of short-term plans.
Short-Term Health Insurance: What is it?
Short-term health insurance is designed to provide fast and flexible options for filling the gaps that can pop up when an individual transitions between regular healthcare coverage. Short-term policies are typically meant to be used for 12 months or less but may include optional renewal periods of up to 36 months.
Who is Most Likely to Need or Benefit From a Short-Term Plan?
What kind of coverage gaps can a short-term plan fill in the first place? Suppose your healthcare coverage was previously provided through a parent’s, spouse’s, or employer’s plan. In that case, it may be confusing if your life circumstances change and you find yourself without coverage for the first time. Even if you’ve successfully navigated the health insurance market and have selected a long-term plan, it might not immediately take effect.
A short-term insurance plan might be worth looking into if:
You’re turning 26 and can no longer remain on a parent’s insurance plan.
You’re an upcoming or recent college graduate no longer eligible for a student plan.
You missed the most recent healthcare open enrollment period and didn’t qualify for a special enrollment period.
You’re between jobs or waiting for new job benefits to take effect.
You’re uninsured while waiting for ACA Marketplace coverage to take effect.
You’re a retiree who will soon be eligible for Medicare but need to cover the gap.
You’re a temporary resident or are in a profession that requires frequent travel, like long-haul trucking or certain nursing jobs.
You can’t currently afford a permanent, comprehensive medical plan.
Short-Term Healthcare Coverage: The Pros
Because the need for fast, flexible options often arises during life changes, short-term plans can offer attractive features to ease these periods of uncertainty. Generally speaking, short-term plans:
Are available year-round and aren’t restricted to specific enrollment periods so that you can shop for coverage anytime.
Tend to have more affordable monthly premiums than permanent, comprehensive healthcare plans.
Often, it comes with quick application turnaround and activation periods.
It can be canceled at any time without penalty.
Offer renewal periods if you will be without coverage for longer than planned.
Offer the potential for more customization since they’re sold on the private insurance market, not via the public ACA Marketplace.
But while the key benefits of a short-term plan may include its flexibility and easy setup, there are reasons it’s not necessarily beneficial as a long-term healthcare solution.
Short-Term Healthcare Coverage: The Cons
As attractive as a short-term healthcare plan may appear, particularly if you’re new to insurance shopping or looking for the most affordable option, it’s critical to look at the other side of the coin. While these plans can be an excellent option for specific circumstances, short-term plans also:
Are not available in all U.S. states
Are sold on the private insurance market and are not subject to the same regulations as policies sold in the ACA Marketplace.
May institute a waiting period before your benefits take effect.
Limit coverage to only the most essential medical services. And since short-term plans are fairly minimal in their offerings, you may be deemed ineligible to purchase a plan if you have a pre-existing condition.
Come with higher deductibles and copays than traditional, comprehensive medical plans.
Are sold on the private market, not within the public ACA Marketplace, so you can’t use tax subsidies to lower the monthly premium.
The bottom line on temporary coverage is that it’s really only meant to hold you over until you’re in the position to pursue a more long-term, comprehensive option. That said, how do you move forward if you’re interested in further exploring or securing a short-term policy?
How Do I Enroll in a Short-Term Insurance Plan?
Remember that once you enroll in a short-term plan, you’ll be shopping the private insurance market, which isn’t subject to the same regulations as the public insurance exchange. And because this can be a particularly confusing arena to navigate, we recommend having an expert guide by your side.
Get an Expert Opinion (for FREE)
When you consult a licensed health insurance agent, you’re working with a seasoned professional who’s got insider knowledge on all the best plan options (like what if what you really need is a catastrophic insurance plan, not a short-term plan?) regulations, and coverage details to make sure you have the most affordable, hand-tailored plan for you.
And best of all, an expert consultation will cost you zero dollars out of pocket. Yep. Nada.
We’re not insurance agents ourselves, but at Trusted Referral Network, we’ve made it our mission to find the very best ones.
You don’t have to do this alone. We’ve got your back.