What is Short Term Health Insurance?
Short Term Health Insurance provides coverage in case of accidents and llness for a defined period of time, often with a much lower monthly premium than other forms of major medical health insurance. There are two advantages of Short Term Health Insurance.
First, you can use your Short Term Health Insurance plan to pay for services from any doctor or hospital (any willing provider). Yes, you can keep your doctor!
Second, Short Term Health Insurance plans have no Open Enrollment restrictions, so you can apply for one any time of the year. You will be notified within minutes if your application is approved, and you can use your coverage as early as the next day.
At AgileHealthInsurance.com, we specialize in affordable Short Term Health Insurance plans, and we are committed to offering consumers a range of choices to fit their lifestyle and budgetary needs.
Why Choose A Short Term Health Insurance Plan?
Short Term Health insurance fills in the gaps. Whether you’ve recently lost a job and are awaiting insurance from the next, want to see the practitioner of your choice, are going through a transition and need coverage for a set period of time, or you’ve fallen into the affordability gap Short Term Health insurance is a flexible, affordable solution. For example, a 29 year old woman making $43,000 per year in South Florida would pay approximately $3,000 per year for a bronze-level ACA plan– also referred to as “obamacare”. For less than $2,000 per year she can purchase a 12-month Short Term Health Insurance plan with a smaller deductible ($5,000 v. $7,900) and save over $1,000 per year.
Short Term Health Insurance is Flexible
The ACA requires each insurance plan offered through the marketplace to include the 10 essential health benefits. Maternity services are included in this list of benefits and are required to be covered by all Obamacare plans. If you are going through a job or life transition, you may not want the same breadth of coverage as Obamacare offers. Or you may not be able to afford it. Short Term Health Insurance generally offer a more streamlined package of benefits, including those that a healthy person would need in case of illness or an accident like coverage for doctor visits, hospital stays, x-rays and other treatment benefits.
You Can Apply at Any Time
If you don’t enroll for ACA health insurance during the Open Enrollment Period–which usually runs from early November to mid December each year– you won’t be able to purchase one unless you qualify for a Special Enrollment Period. Certain life events such as losing health coverage, getting married or moving will qualify you for a Special Enrollment Period.
In contrast, you can enroll in a Short Term Health Insurance plan at any time during the year and receive coverage as soon as the next day.
Who Should Consider Short Term Health Insurance?
This question is better answered by addressing who should not consider Short Term Health Insurance. Short Term plans aren’t for everyone. People with certain chronic conditions, poor health, or complex medical needs are often better served by an ACA or large employer-sponsored health plan plan, both of which offer benefits for numerous conditions including mental health and maternity needs. 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 Insurance plan that will accept them or provide coverage for their pre-existing condition. Even if you don’t need the breadth of coverage an Obamacare plan offers, if the idea of 10 essential minimum benefits is reassuring, then an ACA plan is likely a better fit for you.
Will Short Term Health Insurance Work For Me?
Short Term Health Insurance might be right for you if:
- You missed the annual Open Enrollment Period for Obamacare/ACA plans.
- You have a waiting period before you can enroll in another major medical insurance plan.
- You’re in between jobs, a part-time or temporary worker, or looking for a less expensive alternative to COBRA.
- You are a student, a recent graduate, or have aged out of your parent’s health insurance plan.
- You’ve retired but are too young to be eligible Medicare.
- Your preferred doctor or hospital doesn't accept Obamacare or an Obamacare plan isn't available in your area.
- Like millions of Americans, you simply can’t afford Obamacare.
How Is Short Term Health Insurance Different From Obamacare?
Affordable Care Act plans have broader benefits than those found in Short Term Health Insurance plans and, without the premium subsidies available to some qualified purchasers, they cost much more than Short Term Health Insurance plans.
As mentioned before, all ACA 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 Health Insurance plans usually offer what would be described as streamlined major medical coverage that covers healthcare costs in the event of accidents and illnesses. Most Short Term Health Insurance plans also cover doctor visits for routine illnesses and injuries.
The chart below details some of the major benefit differences between Short Term Health Insurance and Affordable Care Act plans. It is important to note that Affordable Care Act plans do not deny care for pre-existing conditions nor do they reject applicants based on health problems. In addition, states’ rules regarding Short Term Health Insurance are changing so while our chart is a general breakdown, always read your plan brochure before selecting your plan.
|Short Term Health Insurance Plans||Affordable Care Act Plans|
|Coverage availability||Apply any time and get coverage as early as the next day.||Applications are only available during Open Enrollment (or a Special Enrollment Period if you have a qualifying life event) and get coverage on a standardized effective date 2-6 weeks in the future.|
|Coverage duration||364 days (12 months) to 36 months depending on state availability and specific enrollment limitations. 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 a Special Enrollment Period with a qualifying life 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 not covered.||Minimum of 1 drug per class must be covered but the minimum number of drugs per class is often more due to the benchmark chosen for each particular state.|
|Maternity and newborn care||Complications of maternity are covered but not standard childbirth services.||Full coverage. Applicants cannot be denied based on pregnancy as a precondition.|
|Mental health services||Coverage is included when mandated at the state level. Some plans have limited benefits for mental health.||Coverage included, but state laws 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.||All ACA plans have full coverage.|
|Rehabilitative and habilitative services and devices||Coverage is included only when mandated at state level.||All ACA plans have full coverage.|
|Preventive care||Some plans have selected preventive care benefits with cost-sharing. However, most 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.||All ACA plans have full coverage in accordance with how the various states interpret the law.|
|Healthcare provider networks||Short Term 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.|
|Uninsured tax penalties||Recent legislation has lifted the individual mandate. This means short term policyholders will no longer have to pay a tax penalty starting in 2019.||Starting in 2019, there is no tax penalty, whether you have an ACA plan or not.|
|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's Important to Know About Short Term Health Insurance?
Short Term Health Insurance is a great choice for many consumers, but there are certain considerations that you should take into consideration when looking at Short Term Health Insurance as a health insurance option.
Not All Short Term Health Insurance plans are renewable, but instead require you to reapply if you wish to add another period of coverage
Part of the Affordable Care Act dictates rules for non-ACA plans. Short Term Health Insurance is limited to a defined period of time--3 months, 6 months, a year--depending on your state. Federal regulations permit Short Term Health Insurance to be renewed or linked (separate plans linked to create a longer coverage period), but the availability again depends on your state. As a result, Short Term Health Insurance plans often cannot be automatically renewed, and 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 will often review up to five years of your health history.
Short Term plans are not required to have the same coverage benefits as Affordable Care Act (Obamacare) plans
The Affordable Care Act established a very clear set of minimum coverage benefits called the "10 essential health benefits." Short Term Health Insurance is a streamlined type of major medical insurance and does not cover all of the ACA’s “essential health benefits” such as maternity or mental health. As a result, the premiums for Short Term Health Insurance are often significantly less expensive.