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Short term health insurance, also known as temporary health insurance, is a medical plan that can provide individuals and families healthcare coverage for a set period of time, typically from just 30 days up to 364 days of coverage, depending on individual state rules. Having a similar plan makeup as permanent individual health insurance, short term health insurance is structured to cover doctor office visits, hospitalization, emergency room care, and select lab tests. (Permanent, individual health insurance is also known as an Obamacare plan and sold on the federal or state marketplaces). Short term plans also have familiar permanent insurance terms like monthly premiums, deductibles, coinsurance, copays, and out-of-pocket maximums ;terms you would find on an Obamacare plan. An important and differentiating benefit on many short term health insurance plans is an open network, which is an all-access pass to see any doctor or hospital, not forcing you into a narrow, pre-dictated network of providers which can be common with Obamacare plans.
Most consumers are surprised when they learn that temporary health insurance costs nearly half the price of an Obamacare plan. Short term health insurance plans are less expensive because they exclude certain benefits such as maternity coverage and ongoing mental health coverage. Because of this, temporary health insurance plans do not meet the minimum benefit requirements of the Affordable Care Act (ACA) and do not cover consumers with health conditions that existed prior to purchasing the plan. This is why temporary, short term plans, cost 50% or less since consumers are not paying for full, permanent insurance. Short term health plans are meant for the “right now.”
It is very easy to find out if you are eligible for short term health insurance, and the vast majority of consumers who apply for short term coverage are accepted for coverage. Short term health insurance applications generally have five to seven medical “knock-out” questions that determine eligibility, so it will take a minute or two to review and answer those questions. Insurance companies have different application requirements, so we recommend calling to speak with a licensed health insurance agent if you have questions regarding your eligibility.
To buy a short term health insurance plan online, it’s important to first research and compare your options. Some health insurance marketers offer a variety of plans so do your analysis carefully. Things you might want to think about when looking for a short term medical plan include:
Not all short term health plans offer one or all of these benefits, so shop wisely. Figure out what is most important to your health and wellbeing and then compare plans. Many websites have filter options so you can search for plans based on the monthly cost, deductible, insurance company and more. Using filters can help narrow down what you can afford and what type of coverage you need.
Some short term health plans have an all-access policy, meaning, you can see any doctor you wish because your medical claims are paid based on a percentage of Medicare’s scale for provider reimbursement. What this means is, if you visit a doctor, they would send in a claim to the plan’s administrator for payment. The administrator would, in turn, send the provider a fixed dollar amount based on Medicare’s payment scale to pay for the medical services incurred. This allows you to continue seeing your current doctor. To avoid any balance billing, you should confirm that the percentage of Medicare will be sufficient to pay the bill.
If the short term health plan has a PPO network, that means you have to find a doctor in the network so your medical claims are billed at the in-network price. You can typically go outside of the network, but there is no guarantee that the administrator would pay for your medical bill since you didn’t stay in-network (it will vary by plan). Some individuals like the assurance of having their medical bills paid by seeing in-network doctors. It all comes down to personal preference.
If you decide to purchase a temporary health insurance plan after completing your comparison shopping, you will need to fill out an application for coverage. There are a few steps to getting approved.
Health insurance companies are allowed to ask you medical questions when you apply for a short term health plan. The questions are asked to make sure you are the right candidate for this type of insurance. You will be asked if you have been denied insurance in the past due to a health condition. You will be asked if you have been advised by a doctor to have medical tests done and have not acted yet. You could also be asked if you have had specific medical issues in the past, such as cancer or hepatitis (as an example). The questions vary from company to company, but there are typically a handful of questions to answer before you can proceed with your application.
Depending on your state of residence, short term health insurance coverage durations can vary from a maximum of 90 days up to 364 days. Some states even let you enroll for up to nearly three years in a row (essentially three 364-day policies). How much temporary coverage do you need? Plan to be asked how long you need the temporary insurance coverage. The good news - if you are uninsured and sign up for 30 days of coverage, confident you will have a new job before the month is out, and your plans fall through, you can enroll in another policy. If you sign up for six-months of coverage but don’t need the coverage after month four, you can cancel your coverage anytime and won’t have to pay for all six months. Short term health insurance is flexible and can fit many different coverage needs.
Short term medical insurance can be an alternative solution for nearly anyone who has a temporary health insurance need to fill. Just a few types of life situations that can warrant a short-term health plan are:
If you suddenly find yourself without health insurance, short term medical plans can be a solid solution, especially if you are outside of the ACA Open Enrollment period, which generally runs from November 1 to December 15 every year. If you become uninsured during the six-weeks of Open Enrollment, you should look at an ACA plan first. But if you are like most who become uninsured outside of the Open Enrollment period and don’t qualify for Special Enrollment period, temporary health insurance can get you covered the next day and stay with you through the coverage duration allowed or until you find another permanent healthcare solution.
There are many structural similarities between temporary health insurance and Obamacare plans, but there are also many benefit differences. Here are a few to highlight:
If you plan to have a short term health insurance plan for more than a month, you might want to consider other health insurance policies to round out your healthcare package of benefits. Many companies offer dental insurance or hospital indemnity insurance as supplements to short term medical coverage. Plans that cover other areas of the healthcare system could be good to have should an unexpected situation play out.
Temporary health insurance plans for the short term are not a bad thing. If you lose your health insurance coverage due to job loss, you have a limited income on top of being uninsured. Short term health coverage can provide some comfort during a stressful time, whether it’s unemployment, early retirement or not being able to access the Obamacare marketplace due to timing. Going without health insurance coverage is a financial risk. Being able to get affordable coverage when you need it the most is something that most can get behind.
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