The Facts About Short Term Medical

September 11, 2023

Is Short Term Medical Right for You

What is short-term health insurance?

Short-term medical is temporary health insurance. It’s designed to be cost-effective and flexible during times of transition, allowing you to:

Get covered as soon as possible. Apply online and enroll within a few minutes. Coverage is available year-round and may begin as early as the next day, if you’re eligible.
Choose your policy length. Policies last from 30 days and to 364 days, depending on where you live and how long you need coverage.
Access benefits right away. Coverage is typically limited to unexpected medical expenses rather than long-term healthcare needs (i.e., preventive care, maternity).

The Affordable Care Act doesn’t apply to short-term health insurance, which means it isn’t guaranteed issue may not include pre-existing conditions and does not include all of the essential health benefits that major medical insurance (aka ACA plans) must include.
While short-term health insurance does not provide major medical coverage, it does have some similarities:

You pay a premium in exchange for coverage.
You present your plan ID and pay a copay, if required, when visiting a healthcare provider.
Your provider files a claim with your short-term health insurance carrier, which pays for covered medical expenses according to your policy.
You receive a bill for your portion.

Like ACA plans, short-term plans typically include a deductible, coinsurance and copayment. They may or may not include a provider network.

What does short-term health insurance cover?

Short-term health insurance generally covers high-dollar medical expenses related to injuries and unexpected illnesses. For example, plan benefits typically include things like hospital room and board, emergency care, and surgical services. Some may include benefits for a few basic preventive care services (e.g., Pap smears) or limited coverage for pre-existing conditions . Bottom line: You’ll want to shop around to see what short-term plan best suits your needs.

Short-term health insurance vs. Major medical insurance

Short-term health insurance and major medical insurance are different products designed to serve different needs. It’s not a true apples to apples comparison. At a high level, here’s what to know about each product:

Short-term medical insurance plans:

Provide temporary coverage with a focus on unexpected healthcare.
May be purchased year-round. There are no open or special enrollment periods.
Does not include all of the essential health benefits.
Is not eligible for ACA subsidies (i.e., premium tax credits and cost-sharing reductions)
Is not guaranteed issue. You can be denied coverage based on your health history.
Is not available in every state.

Major medical insurance:

Provides long-term coverage with a focus on healthcare across the spectrum (e.g., preventive, pre-existing conditions, unexpected).
May be purchased during the annual open enrollment period or a special enrollment period, if you qualify.
Includes all of the 10 essential health benefits.
Is eligible for income-based ACA subsidies if you buy from a government exchange and qualify.
Is guaranteed issue. You cannot be denied or charged more based on your health history.
Is available in every state.

The decision ultimately depends on how long you need coverage, your typical healthcare needs and your financial situation.

Is short-term health insurance right for you?

Short-term health insurance coverage isn’t available to everyone. Applicants can be denied based on health history, and plans aren’t sold in every state. These types of plans also may not be a fit if you qualify for an ACA subsidy, have pre-existing conditions, want all of the essential health benefits (e.g., preventive care, maternity), or expect to need long-term coverage. Generally speaking, temporary health insurance tends to be a fit for healthy people who are:

Between jobs with employer-based benefits.
Attending college outside a parent’s health insurance plan network.
Early retirement before Medicare takes effect.
Aging off a parent’s health plan and not yet being enrolled in other coverage.
Looking for an alternative to COBRA , if it's too expensive.
In an employer waiting period before group benefits take effect.
Ineligible for an ACA subsidy or Medicaid but unable to afford major medical insurance at this time.