Is Short Term Health Insurance a Good Idea?
- You’re in control
- Premiums can be more economical
- No enrollment periods
- Financial protection from the unexpected
- Not ACA-compliant
- Coverage is limited
- Obamacare subsidies don’t apply
When you’re between major medical plans, life can feel a bit vulnerable. But you don’t need to risk paying unexpected medical bills 100% out of pocket. The market offers plenty of coverage options these days, including short term health medical plans.
Short term plans can be an attractive option if you’re looking for temporary coverage that helps protect your finances against catastrophic healthcare claims. But why short term health insurance as opposed to an Obamacare major medical plan?
Learn more about the pros and cons of short term health insurance, so you can decide if it’s the right choice for you.
Pros – why a short term plan may be a good idea
Temporary insurance can be a smart solution for those in relatively good health who want benefits to help with big, unexpected medical bills (think of those related to hospitalization or surgery) rather than smaller, more routine healthcare costs (for example: maintenance visits for an existing health condition).
Here are some other reasons to put short term in the plus column:
You’re in control
Temporary health insurance tends to be highly customizable and provides you with options. For example, you can:
- Choose your policy length, from 30 days to 3 months.
- Select your deductible and coinsurance amounts.
- Continue to visit your preferred healthcare providers—or access discounts when you use a plan’s partnering network providers.
- Decide to spend a bit more for more robust coverage, including plans with limited benefits for pre-existing conditions or certain preventive services.
Premiums can be more economical
All in all, short term plans tend to cost less than Obamacare plans. When you compare the average ACA premium with the average short term premium, the monthly savings averages $284 for an individual and $757 for a family.1
Furthermore, many short term plans partner with national networks to bring you discounted care when you visit participating healthcare providers.
No enrollment periods
With short term coverage, you don’t have to wait for open enrollment or qualify for a special enrollment period. You can shop and enroll year-round—and the process is relatively snappy.
- Get a quote within seconds
- Apply and enroll online 24/7, within just a few minutes
- Begin coverage as early as the next day, if you choose
Financial protection from the unexpected
When you’re in between Obamacare plans and looking for an affordable alternative, short term health insurance policies include benefits for a range of healthcare services. While specifics vary by plan, covered expenses typically include hospital room and board, surgical services, emergency room treatment, intensive care, and outpatient surgery—you can read more about what short term plans cover here.
Cons – when temporary coverage isn’t the right fit
Of course, short term plans may not be the right fit for everyone. As you weigh your options, you will want to consider whether or not the following are important to you:
Short term plans aren’t ACA compliant
Because short term coverage is designed to be more affordable during temporary situations, it doesn’t qualify as minimum essential coverage under the Affordable Care Act.
That means you could still owe a tax penalty unless you are exempt from the individual mandate, Keep in mind that one of the ACA’s exemptions is experiencing a single period of up to 3 months without minimum essential coverage.
Additionally, short term plans do not include:
- Essential health benefits or preventive care services as defined by the ACA—that said, some plans do include a few covered preventive services
- Guaranteed issue coverage, factors such as age and health history can impact your eligibility—again, some plans, including the Connect Plus plan available through Health eDeals may include limited benefits for pre-existing conditions
- Coverage for pre-existing conditions
Read more extensively about what short term health insurance covers.
Coverage is limited
Short term health insurance plan durations currently max out at 90 days—though, that could change soon. In some states, you can reapply; however, the policy is considered new and separate. If you need coverage for more than 90 days, you may want to consider an ACA plan.
As mentioned above, benefits don’t typically extend to pre-existing conditions or preventive care. That said, some policies, including the Connect Plus plan, offer limited coverage for them at a slightly higher premium cost.
Obamacare subsidies don’t apply
Temporary health plans are not eligible for premium tax credits and cost-sharing reductions. Only major medical plans sold through HealthCare.gov and state-based exchanges qualify for subsidies.
Summary + Next Steps
Short term health insurance plans can be a nice alternative if you’re looking for temporary coverage that helps protect against catastrophic medical expenses and costs less than major medical insurance.
It may not be a good fit if you need more comprehensive, long-term coverage or are eligible for a subsidy that could substantially reduce your Obamacare premium. You’ll have to weigh the pros and cons to decide for yourself.
Looking for more reasons to buy short term medical as an Obamacare alternative? Learn more.
How much does temporary coverage cost? There are 3 ways to quickly find out:
2. Call the number on your screen to speak with a certified advisor—one of Health eDeals’ knowledgeable health insurance producers.
3. Use Agent Finder to search for local assistance.