If you’ve missed the health insurance Open Enrollment Period (OEP), or if you have had a sudden lapse in your insurance coverage, you might be stressing over how to get covered. But don’t worry, you still have options! One of your best options will be a short-term health insurance plan. These plans tend to be less expensive than traditional health insurance because they provide very limited coverage, and so they are usually meant as a stopgap for generally healthy people. So, what do these plans cover (and what don’t they cover), and what are the specific rules surrounding them?
What Short Term Plans Cover
Compared to traditional health insurance plans, which typically include a comprehensive range of benefits, short-term health insurance plans offer significantly less coverage. In fact, they are not required to provide coverage for the “10 essential health benefits” that traditional ACA-approved plans are required to cover.
That means short term health plans are not required to provide coverage for:
- Pre-existing conditions
- Maternity care
- Mental health
- Substance abuse treatment
But, with that being said, short term health plans are better than nothing, and generally provide coverage for:
- Outpatient surgeries
- Emergency room and urgent care visits
- Doctor visits
- Prescription drugs
The Cost of Short-Term Plans
What you can expect to pay for a short-term health plan will be determined by the specific plan that you choose, as it would be with any other type of insurance. You will be responsible for paying a monthly premium, in addition to:
- Deductibles – As with other types of insurance, with a short-term plan, you pay for services out-of-pocket until your deductible is met. After that, your plan will start to split costs. Short-term health plans can have deductibles that are much higher than those of other, more traditional health plans.
- Coinsurance – After you’ve met your deductible, your plan will cover your medical expenses in part, but you will also have to pay a percentage, known as coinsurance. For example, you might have to pay 30% of each covered medical expense, while your plan covers 70%.
- Copays – This is a set fee that you may have to pay when you use a medical service. For example, you might have to pay $20 at the point of service when you go to the doctor.
- Other expenses – If there are health care services that your short-term plan doesn’t cover, you might have to pay for them completely out-of-pocket. For instance, some short-term plans might not cover or only cover a certain amount of maternity care, mental health or substance use services, vision care, or dental care. If you need these services, you’d have to pay for them yourself.
One good thing about the costs of these plans is that their monthly premiums are typically much more affordable than the premiums for plans offered under the Affordable Care Act (ACA). With that being said, the reason that they are sold at a lower price is because most of the time, these plans don’t cover much, and only a portion of the monthly premium actually winds up being applied toward the cost of actual medical care.
Short Term Plans State-by-State
When it comes to the rules surrounding short term plans, every state is different. In fact, some states don’t even allow residents to buy these plans, but most allow a limited length of time to have one of these plans.
The following states allow you to have coverage with a short-term plan for 364 days, and allow you to renew up to 3 times for a total of 3 years of short-term coverage:
- North Carolina
- North Dakota
- Rhode Island
- South Dakota
- West Virginia
The next set of states allow for coverage from short term plans to last between 1 and 3 years:
- Kansas – 365 days for your initial plan and 1 renewal, giving you a total of 24 months.
- Maine – 364 days for the initial plan, with 1 renewal for a total of 24 months
- Ohio – 364 days, no renewals
- South Carolina – 11 months for the initial plan, plus allows 3 renewals for 33 months in total.
- Wisconsin – 364 days, allows for renewal but only for a maximum of 18 months of coverage
If you live in the following states, your initial term with one of these plans can be be up to 6 months:
- Michigan – 185 days (just over 6 months)
- Minnesota – 185 days
- Missouri – allows for renewals for a total of 36 months of coverage
- Nevada – 185 days
- New Hampshire
The next states have an initial term of 3 months:
- Virginia – allows for 1 renewal for up to 6 months of coverage
The last set of states have either banned or no longer offer short term plans due to a change in their laws:
For more in-depth information on your state’s laws surrounding short term insurance, check out our state-by-state guides to health insurance.
Pros and Cons of Short-Term Plans
Short term plans can give you a number of advantages. But you should be aware that there are some drawbacks to this option as well. Knowing both the pros and cons of these plans will help you make an educated decision.
- Affordability – The low price of these plans’ premiums is a highly attractive benefit.
- Quick coverage – Plans usually go into effect within 7-14 days of enrolling.
- Easy Cancellation – It is possible to terminate short-term insurance plans with little advance notice, particularly if you pay for your plan on a month-to-month basis.
- Renewal Limitations – Short term plans do not automatically renew, and the number of times you are allowed to renew them is usually capped.
- Coverage Limitations – In most cases, a temporary health insurance plan will not include coverage for all ten essential health benefits.
- Availability Limitations – Not all states or insurance companies offer short-term plans to their customers.
Qualifying for Short Term Health Insurance
As discussed above, the majority of states permit short-term health plans, but there are a few that do not, and others that place restrictions on how long coverage can be maintained.
But even if your state permits short-term plans, you may still be denied coverage by an insurance company for health reasons. For example, you might be denied a short-term plan if you have a serious preexisting medical condition, or if you’re currently expecting a child.
In general, you will qualify for short term plans if you:
- Are young and healthy.
- Missed the OEP, and don’t qualify for a Special Enrollment Period
- Are out of work and can’t afford COBRA or an ACA plan and need coverage in the meantime.
- Are almost eligible for Medicare but do not want to enroll in a full year-long plan.
If you have a pre-existing condition, such as asthma or diabetes, you might want to steer clear of short-term plans even if you can get approved, because your premiums will be significantly more expensive, since these plans are not subject to ACA rules on preexisting conditions.
How to Buy Short Term Plans
Although you may be able to enroll in a short-term plan in person in some circumstances, the most common method for purchasing short-term health insurance is doing so online. You can also contact an insurance company that specializes in selling short-term plans directly.
Because of the state regulations surrounding short term health plans, and because these plans are offered by both national and regional companies, their availability is highly dependent on the state you live in. National companies sell short term health plans in multiple states, and regional companies have more localized service areas, so you’ll need to shop around. Speak to an EZ agent about what companies in your area offer the best short-term health plans.
Will my doctor accept short term health insurance?
It depends on the plan. Some plans require you to stay in their network of doctors, with other plans, you can choose your own doctor and hospital without being subject to any restrictions. With that being said, in this case, there may still be financial incentives for using in-network providers.
Are pre-existing conditions covered?
When you apply for a short-term health plan, you’ll have to answer a short list of questions about your health, including about preexisting conditions. There’s a chance you will be denied coverage if you have certain preexisting conditions, and even if you are considered eligible for coverage, your plan will most likely not provide coverage for treatment of your preexisting condition.
So, when applying for one of these plans, examine the policy’s wording thoroughly. It’s common practice for short-term plans to use post-claims underwriting, which means that they’ll take your word for it about your health when you sign up, but can check your records after you’ve filed a claim to make sure you weren’t lying about any preexisting conditions.
Is losing my short-term coverage considered a qualifying life event?
Since short term health plans are not ACA-approved plans that provide minimum essential coverage, losing such a policy does not warrant a Special Enrollment Period that will allow you to shop for an ACA-compliant plan outside of Open Enrollment.
So, is a Short Term Plan the Best Option?
The purpose of short-term health plans is to provide healthy people with temporary, limited protection. Therefore, those who have ongoing medical needs or who have a history of illness should avoid short term health plans. If you’ve lost your coverage, and are in-between plans and looking to cut costs, short term health coverage is the way to go. But before you make a purchase, you should think carefully about whether or not it will meet your needs.
You can get information on short term health plans by contacting EZ.Insure and speaking with a licensed agent. We’ll go over all the details with you and help you figure out if one of these plans is right for you. And if it turns out a short-term health plan isn’t the best option for you, we’ll find you something that fits your budget and your health status. Get an instant quote by entering your zip code in the box below, or to speak to an agent directly, call 877-670-3557.