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Is Short-Term Medical Insurance Right for You?

Is Short-Term Medical Insurance Right for You?

Posted May 08, 2018 by Jenifer Dorsey

You may have heard about temporary medical insurance, but who’s it for? Possibly, you!

Life changes can interrupt your access to a major medical plan. When Obamacare isn’t an option and you need alternative coverage, a temporary product known as short-term medical insurance could be right for you.

Short-term plans offer you and your family a range of healthcare benefits to help pay for unexpected medical expenses. The application process is quick and easy, and you can enroll year-round.

Let’s talk about when you should buy temporary health insurance, what it costs and how to find coverage now.

What is short-term health insurance?

Short-term health insurance is a form of alternative health insurance. While there is a range of coverage to choose from, premiums are generally less expensive than major medical premiums because plans include less coverage and are effective for a limited period of time (from 30 to 90 days under current rules). Read our “Complete Beginner’s Guide” to short-term health insurance to learn more.

Who is temporary medical insurance for?

Generally, anytime that you’re experiencing a life transition is a time to consider temporary coverage. Common situations include:

●      Starting an employer waiting period

●      Missing Obamacare open enrollment

●      Ineligibility from special enrollment under the ACA

●      Aging off a parent’s health insurance plan upon turning age 26

●      Being granted an exemption from the ACA’s individual mandate, including a single period of up to 3    

         months without minimum essential coverage

●      Recently getting divorced or losing access to a spouse’s health insurance plan

●      Obtaining part-time or seasonal employment

Are short-term medical health plans still relevant in the age of Obamacare?

Absolutely. As shown above, there are many times in which a major medical plan doesn’t make sense or isn’t an option.

Take a look at how short-term plans compare with ACA plans to better understand why you may choose one over the other, depending on your life circumstances:

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

30-90 days

365 days

 

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

 

Fulfills Individual Mandate

No; a tax penalty may apply if you are not exempt -- exemptions include a single period of up to 3 months without minimum essential coverage

Yes

 

Subsidies Available

No

Yes

 

Guaranteed Issue

No

Yes

 

* IHC recently launched the first-ever short-term medical plan that provides coverage for certain pre-existing conditions.

What does temporary health insurance cover?

Many things! Short-term plans include benefits for a range of healthcare expenses, though, the specifics will vary by plan. That means it’s important to read brochures and ask questions to understand the coverage you are buying.

Some examples of expenses short-term health insurance may cover include:

●      Inpatient and outpatient hospital care

●      Intensive care

●      Emergency room visits

●      Ambulatory services

●      Surgical services

●      Certain pre-existing conditions

Keep in mind: Because temporary plans are not intended to replace major medical insurance, their benefits are less comprehensive. They are not considered minimum essential coverage under the Affordable Care Act and, therefore, do not include the essential health benefits or fulfill the individual mandate.

If you are not exempt from the individual mandate and have short-term coverage instead of major medical, you could owe a tax penalty.

Find out more about ACA exemptions to see if you might qualify.

How much does short-term coverage cost?

Short-term plans are designed to be an economical option while you are in a life transition. Of course, the actual cost varies depending on the plan options you select.

In general, here’s how short-term health insurance premiums compare with Obamacare premiums:

ACA vs. Short-Term Health Insurance Premiums Comparison

  Average ACA Premium[1] Average Short-Term Premium[2] Monthly Savings

Individual

$393

$109

$284

Family

$1,021

$264

$757

 

Find out what short-term coverage would cost you. Get a quick quote!

How do you apply for a temporary plan?

You can shop and apply for short-term health insurance online at healthedeals.com or by calling the number at the top of your screen. You can also buy short-term plans through a producer or directly from a health insurance carrier that sells them.

Short-term health insurance is available year-round. You don’t have to wait for open enrollment!

Buying temporary insurance from Health eDeals is as quick and easy as 1-2-3.

  1. Get a quote within seconds. Enter a few bits of information such as your ZIP code and date of birth to get plan pricing in seconds.

  2. Apply for coverage within minutes. Select the plan that works for you. Provide your contact information, answer a few short medical questions, and supply your payment information. This process takes only a few minutes.

  3. Start your coverage within 24 hours. Once you’ve been approved, your policy can begin as early as the next day.

Start the process now!

 

First published September 27, 2013.


[1] How Much Does Obamacare Cost in 2017? - eHealth Insurance Resource Center. (2017). eHealth Insurance Resource Center. Retrieved 19 April 2018, from https://resources.ehealthinsurance.com/affordable-care-act/much-obamacare-cost-2017

[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