Short Term Health Insurance

A temporary health insurance plan for those in-between times

Short term health insurance (STM), also referred to as temporary health insurance, is a type of medical coverage that is available for shorter durations of time, such as up to three months. Temporary insurance plans have more restricted coverage than major medical but also can have a lower premium.

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What Does Short Term Health Insurance Cover?

Covered expenses for temporary health insurance plans generally include the high-dollar, unexpected care and treatment you may require as a result of an illness or injury – from a serious medical event like a heart attack or stroke to a broken leg or doctor’s office visit due to illness.

Remember, these plans are highly customizable (that’s one of the perks!). The chart below describes benefits that may be covered with short term medical policies.

Individual insurance plans vary, so you’ll want to read the plan details closely to validate the coverage and benefits you’ve selected and what exclusions apply.

What STM Covers
  • Hospital room and board

  • Emergency room – anesthesiology and surgical care

  • Diagnostic services – X-rays, laboratory tests and analysis

  • Ambulance and surgical services

  • Doctor visits

What STM Does Not Cover
  • Sport-related injuries

  • Injuries or illness related to participating in extreme or dangerous activities

  • Medical costs resulting from injury from riding an ATV (dirt bike, snowmobile, go-cart), racing with a motorcycle, boat or any form of aircraft

  • Treatment of pre-existing conditions

  • Any medical expenses incurred prior to the effective date or after the expiration date of your policy

  • Tobacco, drug, and alcohol-related treatment expenses

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Pros and Cons of Short Term Health Plans

Here are a few of the pros and cons to consider when you’re thinking about signing up for a short term health plan.

  • Short term medical monthly insurance premiums are typically less than major medical premiums, 31.5% less on average[1]. However, STM has less coverage and does not qualify as an ACA plan.
  • Apply year-round – There is no official open enrollment period and, in most cases, coverage begins the next day after you enroll online.
  • Don’t pay for coverage you don’t need – Plans are highly customizable; you can choose from various health benefit levels.
  • Keep Your Doctor – No provider network limitations means you can visit your preferred health care provider.
  • Short term plans can be used alongside other supplemental insurance options such as a hospital plan, dental plan or a prescription drug card (not an insurance product). 
  • Plans have limited durations – Anywhere from 30 to 364 days depending on your state.
  • Less coverage than major medical – Preventive care and many other essential health benefits such as annual doctor’s visits, prescription drugs, vaccinations, and pre- and post-natal care are not covered. If you think you will need any of the 10 essential health benefits guaranteed by the ACA-qualifying plans, then a short term health plan may not be right for you.
  • Pre-existing conditions are not covered – Historically, short term plans have not covered pre-existing conditions.

Who Should Get a Short Term Health Insurance Plan?

Temporary health insurance plans are best for people who:

How long can you stay on your parent’s plan? Do you really need insurance if you're young and healthy?

Learn the best health insurance options for young adults and how to decide which one is best for you.

Learn more

COBRA is not your only option for health insurance if you find yourself unemployed.

Losing your job qualifies you for a special enrollment period for major medical, and there are alternatives like short term health (available year round) as well.

Learn more

What should you do if you don't get health insurance through your employer?

You may need to purchase major medical coverage on your own, or enroll in an alternative health plan.

Learn more

Can you buy health insurance that isn’t Obamacare? Yes.

It’s important to note that Obamacare alternatives are not comprehensive health plans and have less coverage than Obamacare plans.

Learn more

Medicare kicks in at age 65 – so what if you retire before that and lose your job-based group health benefits?

Compare options and select the best one for you.

Learn more

How Short Term Health Insurance Works

Here’s how to use a short term health insurance plan:

When you apply for short term health benefits, you pay monthly premiums in order to receive coverage for eligible medical expenses.

When you get hurt or sick, go to your preferred hospital and obtain the necessary medical services, presenting your insurance card.

The hospital bills your short term insurance carrier, who pays its share of eligible medical expenses and bills you for your share.

When you get billed for the services, you will be responsible for the deductible amount, just like any medical insurance policy. 

After paying the deductible amount, you are responsible for a percentage of the remaining expense (called “coinsurance”).

Once you’ve reached the out-of-pocket maximum for your policy, your insurance plan pays 100% of the remaining covered medical expenses up to the “coverage-period maximum benefit."

Got more short term health questions?

No, short term health insurance does not qualify as minimum essential coverage under the ACA. However, since the individual mandate tax penalty was repealed effective January 1, 2019, there is now no federally enforced financial penalty for not participating in the ACA and obtaining a qualifying major medical policy (Note that you could still be subject to a tax penalty for 2018 or earlier if you went longer than 3 months without qualifying major medical coverage during that time.)
Although short term health plans do not offer the same coverage as an Obamacare plan, they typically cost less than an unsubsidized Obamacare plan. For a comparison, see this example using rates for a 35-year-old woman living in Arizona1:
Plan Type Unsubsidized Premium Deductible
Connect STM Short Term Plan* (HealtheDeals.com) $96.00 $5,000
Lowest Cost Bronze ACA Plan** $317.93 $7,900
Short Term Plan Savings: $221.93 $2,900
* Short Term Health Insurance does not qualify as minimal essential coverage. ** Bright Health Bronze (Plan ID: 87247AZ0010006) The best way to find out what a short term health plan will cost you is to request a quote. It takes about 1 minute to obtain multiple plan options, then compare premium costs and coverages to find the best fit for your needs.
Short term health plans generally have more affordable premiums than major medical plans because they are not subject to ACA provisions and provide less coverage. For example, short- term medical insurance has few or no preventive care benefits. Short term health insurance plans are designed to provide benefits that help with medical bills resulting from unexpected illnesses and injuries. In general, the more coverage you seek, whether through an ACA plan or a short term plan, the higher the premium you will pay. Comparison of Short Term Health Insurance and Obamacare
What They Offer Short Term Medical Plans Major Medical
Coverage Type Temporary, catastrophic coverage Long-term, minimum essential coverage including the ACA’s 10 essential health benefits
Coverage Length 30-364 days (duration limits vary by state) Guaranteed Renewable
Premium Cost Typically less than an unsubsidized ACA plan; cost varies by plan selected Typically more than a short term health plan, but subsidies may reduce cost; cost varies by plan selected
Pre-Existing Conditions Not typically covered; dependent on plan selected Covered by law
Preventive Care Benefits Not typically covered; dependent on plan selected Covered by law
Enrollment Period Year-round enrollment; plans start as early as the day after your application is accepted During the annual open enrollment period, or a special enrollment period when eligible
Subsidies Available No Yes
Guaranteed Issue No Yes

Think a short term health care insurance plan may be right for you?

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How Much Does Short Term Health Insurance Cost?

Short term medical premiums may cost less than many private major medical plans because they provide less coverage.

  • $109 is the average short term health plan monthly premium for an individual.[2]
  • $264 is the average short term health plan monthly premium for a family.[3]

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by Deb Shields August 22nd, 2019
by Sarah Sullivan August 20th, 2019
by Sarah Sullivan August 15th, 2019

[1] Centers for Medicare & Medicaid Services. “Fact Sheet: Short Term, Limited-Duration Insurance Proposed Rule.” Feb. 20, 2018. https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2018-Fact-sheets-items/2018-02-20.html

[2] Lower, A. (2018). Average Short Term Health Premium Creeps Lower | ThinkAdvisor. ThinkAdvisor. Retrieved 19 April 2018, from https://www.thinkadvisor.com/2017/11/13/average-short-term-health-premium-creeps-lower

[3] ibid.