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What Does Short-Term Health Insurance Cover?

What Does Short-Term Health Insurance Cover?

Posted May 10, 2018 by Jenifer Dorsey

It can be tempting to try to save a little money on health insurance premiums when you are in between major medical plans. After all, what could possibly happen in a month or two?

Nobody can predict the answer to that question, and that’s why short-term health insurance plans can be a smart investment.

But what is short-term health insurance used for and what does it actually cover? Possibly more than you think.

Let’s go over what benefits temporary plans typically include and exclude – we’ll talk about preventive care, pre-existing conditions and prescription drugs.

Knowing what’s possible can help you shop around and select the best temporary coverage for your situation.

What is short-term health insurance used for?

Short-term medical plans are a type of alternative health insurance that provides temporary benefits when you are between ACA-compliant coverage–anywhere from 30 to 90 days.

Short-term health insurance can be used to help pay for medical bills that result from an unexpected illness such or an injury. Otherwise, without any health benefits, you may find yourself paying 100% out of pocket for anything from a broken leg to an emergency appendectomy.

Short-term benefits vary by plan and are still subject to deductible, copay and coinsurance. Covered expenses often include:

●      Hospital room, board and general nursing care

●      Intensive or specialized care

●      Emergency room treatment

●      Inpatient doctor visits

●      Ambulance, ground or air services

●      Knee injury or disorder

●      Gallbladder surgery

●      Organ, tissue, bone marrow transplants

●      Doctor office visits

●      Outpatient hospital surgery or ambulatory surgical center

●      Surgical services

●      Administration of anesthetics

Because of their limited nature, short-term plans are often less expensive than major medical premiums. Read our “Complete Guide for Beginners” to learn more about short-term health insurance.    

To learn specifically what the short-term plan you’re considering covers (or doesn’t), read through plan materials and pay special attention to sections that discuss covered expenses, networks, pre-existing conditions, precertification and policy exclusions. Be sure to contact the carrier with specific questions.

Does temporary coverage qualify as Obamacare?

No. Short-term health insurance is not the same as Obamacare, doesn’t qualify as minimum essential coverage under the ACA, and doesn’t fulfill the individual mandate. Check out the table below for a high-level comparison of short-term health insurance and Obamacare.

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

 

You could wind up owing a tax penalty if you are not exempt from the individual mandate and have short-term coverage instead of Obamacare.

If you need help determining which plan type to buy, contact a health insurance producer. You can call the number on your screen to discuss options or use Agent Finder to search for local assistance.

Do short-term health plans cover pre-existing conditions?

Temporary coverage usually excludes pre-existing conditions. However, short-term medical plans are evolving all the time as the health insurance market changes, so it’s worth checking in occasionally to see what’s new.

Connect Plus, which is available at Health eDeals, provides some coverage for certain pre-existing conditions. Keep in mind that there is a dollar limit on the benefit amount this plan will pay out for pre-existing conditions.

Learn more about Connect Plus or call the number on your screen to learn more about this short-term product and whether it might fit your needs.

Is pregnancy covered under short-term medical policies?

As with pre-existing conditions, pregnancy is not something short-term plans typically cover. You may want to see if you can buy an ACA plan to obtain benefits that cover pregnancy, childbirth and postnatal care. Learn more about special enrollment periods and how to qualify.

Are prescription drugs covered by temporary plans?

No, short-term plans don’t typically include benefits for outpatient prescription drugs. If you take prescribed medications, you may want to consider bundling your short-term policy with a prescription drug program such as the RX Paycard.*

Call the number on your screen to ask about RX Paycard, or select this product to bundle with your short-term plan when making your purchase.

Do short-term plans cover preventive care?

Because short-term plans are designed to provide temporary coverage, they mostly include benefits for unexpected injuries and illnesses and not preventive services. This limitation helps keep premiums lower and more economical than major medical insurance premiums.

Sometimes, however, short-term plans will include a few preventive care benefits (though, nothing as comprehensive as the essential health benefits required of major medical insurance).

The specific preventive services covered (if any), and at what amount, will vary by short-term policy.

Also keep in mind that, generally speaking, the more robust benefits you seek in a short-term health insurance plan (or any health insurance plan, really), the higher your premium payment.

Next Steps

Visit our short-term medical FAQ page for more general information on temporary coverage.

Is temporary health insurance right for you? Read this article to help you decide

Learn where to buy a short-term plan right now.

Find out what a short-term medical plan could cost you: Get a fast quote

 

First published Nov. 24, 2015


* Please note that RX Paycard is a discount prescription drug program and not health insurance.

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