Short Term Health Insurance goes by many different names, such as temporary health insurance, short term medical, short term insurance, short-term health plans, term insurance or even STM plans.
Short term health plans offer major medical type benefits in the case of unexpected accidents and illnesses. They are used for individual and family healthcare coverage and last for a defined term of up to 364 days and renewable for up to 36 months depending on your state.
There are definitely advantages to Short Term Health Insurance. Here are some of those advantages:
- You don’t have to change doctors! Short term plans offer broad networks and/or allow you to go to the hospital or provider of your choice.
- Short Term Health Coverage has no open enrollment period restrictions, so you can apply at anytime.
- You will usually be notified within minutes if your application is approved.
- Short Term Health Plans are available without a waiting period, so in many cases you can use your coverage as early as the next day.
- You can month to month and cancel your policy anytime because short term insurance is temporary.
Why Choose a Short Term Health Insurance Plan?
- Temporary insurance can bridge the gap until the next ACA Open Enrollment Period. Unless you qualify for a Special Enrollment Period (SEP), you can only purchase an ACA Plan between November and Mid-December.
- Starting in 2019, there is no tax penalty for having no insurance, or for having a STM Plan.
- Short Term Insurance is adaptable. The ACA has strict requirements regarding the benefits it requires, called 0 essential health benefits. Every plan, for example, must offer maternity services and you cannot be rejected even if you have pre-existing conditions. Conversely, Short Term Health Insurance is affordable because it offers streamlined benefits to cover you for the unexpected illness or accident: hospital, doctor, x-ray, and other treatment benefits.
- Short Term Health Insurance is available 24/7, 365 days a days a year. You can apply for a Short Term plan year round. There are no deadlines or blackout dates. Typically the ACA Open Enrollment Period is from November 1st to December 15th.
How Does Short Term Health Coverage Work?
Short Term Health Insurance is an affordable transition option for people who do not have an ACA or employer-sponsored plan. It can bridge the gap for people moving from full time employment to self-employment or even from college graduate to employee, or other scenarios where finances are tight and the future is unpredictable. It is best for people who are in good overall health, and for people who don’t have certain chronic conditions or complex medical needs, and the amount covered for medical is likely significantly less than a Major Medical Plan from the ACA.
ACA plans offer benefits for chronic and complex conditions, including mental health needs, and wold be more appropriate for folks with larger concerns or requirements medically. Additionally, people who have had a significant health event or medical condition in the past five years may have a hard time finding a Short Term Health Plan that will accept them or provide coverage for their pre-existing condition.
Short Term Health Insurance Might Be GREAT For You If You:
- Missed the Annual Enrollment periods for Obamacare/ACA plans.
- Have a waiting period before you can enroll in another major medical insurance plan.
- Are between jobs, a part-time or temporary worker, or are looking for a less expensive alternative to COBRA.
- Are a college student, a recent graduate or have aged out of your parent’s health plan and you need insurance.
- Recently retired but are still too young for Medicare.
What Are the Major Differences Between Short Term Insurance and Obamacare/ACA
Affordable Care Act plans typically have broader benefits available than those found in the average Short Term Health Insurance plan, but without the premium subsidies available to some qualified purchasers, cost much more than Short Term Health Insurance plans.
All ACA individual Health Plans must have the “10 essential health benefits.” Short Term Health Insurance plans, in comparison, do not have a standardized set of benefits.
Short Term plans usually offer what would be described as streamlined “major medical. type benefits” that covers healthcare costs in the event of unexpected accidents and illnesses.
| Short Term Health Insurance Plans | Affordable Care Act Plans | |
|---|---|---|
| Coverage availability | Apply any time and get coverage as early as the next day. | Apply only during Open Enrollment (or Special Enrollment due to a qualifying event) and get coverage on a standardized effective date 2-6 weeks in the future. |
| Coverage duration | 1 month to 12 months depending on the state. Many states allow you to reapply for back-to-back coverage. | As long as the plan is available. You can change plans during Open Enrollment (or Special Enrollment with a qualifying event). |
| Prescription drug coverage | Many Short Term Health Insurance plans provide a drug discount card but do not provide drug coverage. Some newer plans have a prescription drug coverage option for generic drugs not associated with a pre-existing condition. Brand name drugs and specialty drugs are typically uncovered. | Minimum of one drug per class must be covered but the minimum number of drugs per class is often more due to the benchmark formulary chosen for each particular state. |
| Maternity and newborn care | Complications of maternity may be covered but not standard childbirth services. | Full coverage. Applicants cannot be denied based on pregnancy as a precondition. |
| Mental health services | Some plans offer a limited benefit. In some states coverage is included because the state mandates it. | Coverage included, but states vary on their definition of “mental health” services, so while some do include learning disabilities or conditions like Autism, other states do not. |
| Substance use disorder services | Coverage is included only when mandated at state level. | Covered. Benefit amounts, services and networks are defined by the State and the plans available.. |
| Rehabilitative and habilitative services and devices | Coverage is included only when mandated at state level. | Covered. Benefit amounts, services and networks are defined by the State and the plans available. |
| Preventive care | Some plans have selected preventive care benefits with cost-sharing. However, many plans do not cover preventive care services. | Preventative services must be provided without cost-sharing. |
| Pediatric services – oral and dental care | Coverage is included only when mandated at state level. | Covered. Benefit amounts, services and networks are defined by the State and the plans available. |
| Healthcare provider networks | Short Term Health Insurance plans typically have broad acceptance among healthcare providers. Some have a preferred network with negotiated pricing for healthcare services and a larger non-preferred network where the plans pay ‘usual and customary’ fees for covered healthcare. | These plans have been noted for a significant use of “narrow networks” to increase the ratio of enrollees to healthcare providers. |
| Coverage of pre-existing conditions | These plans evaluate health status and pre-existing conditions when processing an insurance application and determine whether the applicant is approved or rejected for coverage. | These plans do not consider health status or pre-existing conditions when processing an insurance application. |
What is Important to Know About Short Term Health Insurance?
There are certain elements to take into consideration when looking at Short Term Health Insurance as a Health Insurance option.
- Short Term Health Insurance plans are not renewable, but instead require you to reapply if you wish to add another period of coverage. You will need to submit a new application.
- You can be denied coverage due to pre-existing conditions. Like Medical insurance before the ACA, Short Term Health Insurance plans can deny your application based on your current and past health conditions. Insurers with often review up to five years of your health history.
- Short Term plans are not required to have the same coverage benefits as ACA/Obamacare Plans. The ACA established a very clear set of minimum coverage benefits called the “10 essential health benefits.” Short Term Health Plans offers major medical type benefits but does not cover all of the ACA’s “essential health benefits” such as maternity or mental health. As a result, premiums for Short Term Health Insurance are often significantly less expensive but still provide medical coverage for illnesses and injuries and include services such as emergency room, hospitalization, doctors, specialists, labs and other important benefits.
- You can cancel your policy anytime you want. Most Short Term plans allow you to make month to month payments up to the maximum term set by your state. At the end of your policy, your coverage will automatically terminate. If you need to cancel your coverage earlier, contact your Insurance Broker and let them know!!
If you are interested in learning more information about Short Term Medical Plans please contact us by filling out the form below or giving us a call directly at 623-889-7600.