Short-Term Health Insurance: The Pros and Cons
Health insurance is incredibly important. Without health insurance, you face incredibly high costs every time you visit the doctor, an urgent care facility, or a hospital. Even a simple annual checkup could leave you paying hundreds of dollars if you don’t have health insurance. But sometimes, you can lose your health insurance coverage with no notice.
If you’ve lost your health insurance and need coverage, you do have an option: short-term health insurance. A short-term health insurance plan could cover your basic healthcare costs for a few months. Meant to be a stop-gap measure, these types of health insurance plans let you enroll at any time.
But there are both pros and cons to short-term health insurance. Could a short-term policy help you and save you money? While short-term health insurance plans are not allowed in every state, you may be able to take advantage of them where you live.
What is Short-Term Health Insurance?
Short-term health insurance is very different from traditional health insurance. While traditional health insurance offers long-term coverage for all kinds of medical needs, short-term plans do the opposite.
Short-term health insurance can provide temporary medical coverage – but only in certain situations. This type of coverage is only meant to be used when you have a lapse in health insurance, need a plan outside the annual open enrollment period, or need emergency coverage.
And what short-term health insurance actually covers can vary greatly from plan to plan, insurer to insurer. Typically, short-term health insurance plans provide limited coverage for unexpected illnesses, accidents, or injuries. Common health needs, like preventative care, are often not included.
It’s also important to know that these plans aren’t required to meet the guidelines of the Affordable Care Act (ACA), which means there are no rules regarding their coverage. While ACA plans must provide certain levels of coverage, short-term health insurance doesn’t have to do so.
Who Can Get Short-Term Health Insurance?
Anyone can get a short-term health insurance plan if they need one. Of course, like traditional health insurance coverage, there may be requirements, limitations, and costs associated.
According to Health for California, short-term health insurance is designed for situations like:
- Individuals who missed open enrollment.
- Those who are unable to qualify for special enrollment.
- Anyone who’s applied for a traditional health insurance plan but is waiting for coverage to begin.
- Individuals who’ve started new jobs but are not yet on their company insurance plans.
- Older adults who are under 65 years old and almost eligible to apply for Medicare.
- Those who are required to get health insurance coverage by a school or job.
Short-term health insurance can be a good option for many different situations. However, it’s important to keep in mind that this type of insurance is best used when you are unable to secure a long-term or traditional plan.
As such, short-term health insurance is not ideal for:
- Anyone with a chronic health condition.
- Individuals looking for preventative care, such as annual doctor’s visits or regular check-ups.
- Those who do qualify for special enrollment (such as turning 26 or getting married).
- Individuals who do not have an emergency need for health insurance.
If you think short-term health insurance might be a good option for your needs, make sure to check to see if it’s available in your area. These short-term plans are not allowed in some states, and other states do place limitations on their coverage and types of policies.
The Pros of Short-Term Health Insurance
In some situations, short-term health insurance can be a smart investment. For some people, it could seriously help in times of unexpected crisis or a lack of coverage.
Short-term health insurance does offer some benefits. Its pros include:
- Filling short-term gaps in your health insurance coverage only as needed.
- You can cancel any time without any penalties or added costs.
- Short-term coverage begins as soon as the day after you secure your policy.
- Flexibility in the length of your coverage, from a single month to multiple renewals.
- You can secure up to 11 months of coverage, if needed.
The Cons of Short-Term Health Insurance
Short-term health insurance has more stipulations, more limitations, and more potential problem areas than many traditional health insurance plans. Because this type of insurance is meant to offer small scope coverage for only a limited time, it can include more drawbacks for certain individuals.
There are some drawbacks to short-term health insurance. Its cons include:
- Significantly higher deductibles as well as other out-of-pocket costs.
- No coverage for pre-existing conditions.
- Limited coverage for most medical services and procedures.
- Insurers may require a medical questionnaire before approving new policyholders.
- Coverage is not mandated or standardized, so the services covered vary greatly from plan to plan.
- Prescription drugs may not be covered.
- There are limits on renewing, and limits on whether or not you can renew if you develop any major illnesses.
How to Find Short-Term Health Insurance Coverage
If you’re wondering what short-term health insurance coverage can do for you, it’s important to do your research. Because these types of plans can vary so significantly, you’ll need to research different insurance providers, compare their plans and limitations, and examine their coverage. You should also look into whether or not you will qualify for a short-term plan.<
When you consider short-term health insurance, you'll want to try to anticipate your upcoming health needs. Are there any medications you can’t go without? Are there certain medical needs you must have met by your insurance? Don’t forget to think about and consider your budget as well. While premiums for a short-term plan may be within your budget, the out-of-pocket costs should also be considered.
The best way to find this information out is with research and searching online. You can then find short-term health insurance providers in your area or state. Remember, Virginia may not allow these types of plans. However, if Virginia does, you can easily compare different options all in one place when you search online.
Short-term health insurance can be greatly helpful in times of need. So, if you need a plan that can offer temporary or limited-time coverage, start comparing different plans today.
Africa Studio / Shutterstock