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Why Buy Short Term Health Insurance?

Why Buy Short Term Health Insurance?

Buying health insurance is a personal decision and what works well for one person’s circumstances does not work well for another’s. That’s why AgileHealthInsurance helps consumers understand the basics of Short Term Health Insurance before they apply. An informed consumer is our best customer!

The Basics

Short Term Health Insurance is major medical insurance that is creditable coverage under HIPAA and that is used for a defined period of time. In most states, the term can be 364 days (or less depending on the consumer’s preference). Short Term Health Plans are known for very inexpensive premiums. Short Term Health Insurance premiums may cost less than half of an unsubsidized premium for an entry-level Obamacare plan. Enrollees in Short Term Health Insurance plans still face the government’s uninsured penalty (the “Shared Responsibility Tax”) because the plans differ from the Affordable Care Act’s health plan requirements. Even with the penalty, Short Term health insurance can still be a better fit for a person needing transitional coverage, students including foreign students attending U.S. schools, and those for whom Obamacare is not the right fit.

Short Term Health Insurance plans are also known for their wide acceptance among healthcare providers. While Affordable Care Act plans are increasingly moving towards narrow networks with fewer doctors and hospitals serving more enrollees, Short Term Health Insurance plans have continued offering broad network coverage that includes acceptance at many top hospitals and cancer centers in the U.S.

Insurance Coverage

Short Term Health Insurance typically covers many benefits including the following:

  • Doctor visits and specialist visits
  • Lab tests
  • X-Rays
  • Hospitalization
  • Emergency care

Maternity care is not covered by Short Term Health Insurance and other benefits such as drug coverage may be limited or absent. For more information what benefits are typically included in Short Term Health Insurance, see What Is Term Health Insurance?

Pre-existing Conditions

Short Term Health Insurance plans do not cover pre-existing medical conditions. People who have had a significant health event or medical condition in the past two years also are advised to seek other forms of health insurance.

People can apply for Short Term Health Insurance throughout the year and are not limited to an Annual Enrollment Period as is the case with the Affordable Care Act. The application for Short Term Health Insurance does ask about health status and answers that indicate suboptimal health may result in the rejection of the application.

The ideal profiles for people who purchase Short Term Health Insurance include:

  • People of any age below 65 in good overall health
  • People who need health insurance for a specific period of time (e.g. an interval in between jobs)
  • A young adult who can no longer be insured through his or her parents’ health plan
  • Foreign students attending U.S. schools
  • People who need health insurance outside of the Affordable Care Act’s enrollment period but who do not qualify for a Special Enrollment Period
  • Retirees who no longer have employer-provided health insurance but are too young to enroll in the Medicare program

AFFORDABLE CARE ACT TAX. Short Term health insurance is health insurance outside of the Affordable Care Act ("Obamacare"). It does not include all ten of the minimum essential benefits of Obamacare and it does not cover pre-existing conditions. To learn more about the tax, its exemptions, and how to calculate the affordability of short term health with the tax, see here. To learn more about the differences between Short Term health insurance and Obamacare, see here.