The Affordable Care Act (ACA) has helped thousands of people secure coverage, but there are still many Americans who have not bought health insurance because of the cost. Temporary medical insurance might be a good option if you’re looking for affordable short-term health insurance. But, keep in mind: Short-term health insurance plans are not a replacement for ACA plans. Also, while short-term health insurance plans are available in most places, there are some state-by-state variations.
What Is Short-Term Medical Insurance?
Short-term health insurance is a type of coverage that can be used to fill gaps in coverage while you’re between jobs or waiting for employer-based health coverage to begin. These policies are available year-round for people who need health insurance coverage as soon as possible. In some cases, short-term health insurance coverage can begin as soon as the next day.
Can You Buy Short-Term Health Insurance?
Yes, short-term health insurance can be for term periods ranging from one month to just under a year—364 days to be exact. Plans can go into effect as soon as 24 hours after applying. Short-term health insurance policies, also known as temporary medical insurance, can be “renewed” beyond the initial plan term up to almost 36 months, or three years, in some states. But, it’s important to know that when “renewing” your short-term coverage, you’re actually re-applying for a new plan term, even if the coverage remains the same. It’s possible that any change in your health prior to this “renewal” could be considered a pre-existing condition on the new plan.
Is Short-Term Health Insurance Essential Coverage?
No, temporary health insurance plans are not considered “minimum essential coverage,” as defined by the Affordable Care Act (ACA). These plans are designed for unexpected accidents and illnesses. Since short-term health insurance plans are not ACA compliant, they do not include the 10 essential health benefits that ACA plans are required to offer. For example, in most cases these plans do not cover services such as:
- Preventive care
- Maternity care
- Treatment of mental illness
Other Differences Between Short-Term Insurance Plans and Affordable Care Act Coverage
Two other differences between short-term insurance plans and individual ACA-compliant health insurance plans are:
- Short-term health insurance plans aren’t required to cover pre-existing conditions. The ACA prevents health insurance providers from denying coverage or charging more because of an existing illness. But short-term insurance plans are not required to cover pre-existing conditions because they are not ACA compliant.
- There’s no guaranteed “renewal” with short-term insurance plans. When your self-selected coverage period is up, you must reapply for coverage. Any conditions that you may have developed during your initial coverage term will be taken into consideration the second time around, meaning you can be denied coverage.
When making comparisons between the two, remember that short-term health insurance is meant for a catastrophic health event or illness. It is not intended to work as long-term coverage. But, it can provide insurance coverage options, especially to those who may not be able to obtain major medical insurance. HealthMarkets can better help you understand the differences between the two types of coverage.
How Much Does Short-Term Health Insurance Cost?
In 2018, a three-month affordable short-term health insurance policy for an individual could be purchased for around $107 per month. In comparison, the average comprehensive ACA-compliant plan averaged $490 per month without subsidies. Short-term health insurance plans can be paid for up front or billed on a month-to-month basis. Most polices are available year-round and can be canceled at any time.
Often, cost is the main reason why people purchase short-term health insurance instead of comprehensive health insurance plans. In fact, 51% of those who bought short-term health insurance policies in 2016 cited price as the driving factor. Short-term health insurance could be a good fit for your needs, if you don’t qualify for a premium-lowering tax subsidy or an ACA plan is too expensive. It’s important to remember that, while cheaper, short-term health insurance policies differ from ACA plans in what they will – and will not – cover.
Get Affordable Gap Insurance Today
HealthMarkets can help if you are stuck in a gap without health coverage and don’t know what to do. We can help you get a free quote and explore all of your insurance options, ranging from affordable short-term health insurance to an ACA-compliant individual health plan. We can help you find the best short-term health insurance plans available in your area, compare your coverage options, and apply for a health plan that matches your budget and needs. If you’re looking for something different, we can help you find coverage—even if your best option doesn’t include plans we sell. Get started today.