Short-term health insurance

Short-term health insurance is an inexpensive coverage option for set periods of time, but it doesn’t cover everything. Make sure you know the coverage limitations before you buy a short-term health insurance plan.

Chris Kissell is a Denver-based writer and editor with work featured on U.S. News & World Report, MSN Money, Fox Business, Forbes, Yahoo Finance, Money Talks News and more.

Leslie Kasperowicz is an insurance expert with four years of direct agency experience and over a decade of creating educational content to help insurance shoppers make confident, informed decisions.

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Short-term health insurance plans offer coverage for many types of medical care and often cost much less than traditional health insurance coverage. They're an option for people who are in between full plans.

“The coverage is more affordable and allows people greater flexibility to buy coverage that better meets their needs,” says Brian Blase, president of Paragon Health Institute, a healthcare policy research group.

However, these plans have significant coverage limitations, and you could end up with thousands of dollars in medical bills if something goes seriously wrong. It is important to weigh the pros and cons of this type of coverage before you buy.

Key takeaways

What is short-term health insurance?

Short-term health insurance policies are plans that offer coverage for less than one year. The coverage with these plans is not as robust as you would get with a standard health insurance plan.

For example, a short-term plan may not offer as many benefits as a typical one. It also might lack some consumer protections.

When the Patient Protection and Affordable Care Act passed in 2010, it guaranteed that all health plans must meet minimum standards of care and services. However, the ACA does not govern short-term plans.

The biggest advantage of short-term plans may be their costs. They are often much more affordable than standard health insurance.

But, these plans are medically underwritten. That means that many people with pre-existing conditions typically do not qualify for coverage.

How to get temporary health insurance

To buy a short-term plan, you must either purchase it directly from the insurer or go to a private health insurance market such as eHealth.

You cannot buy short-term health insurance on the federal or state-based health insurance marketplace. All plans sold on these marketplace platforms must meet the standards established by the Affordable Care Act. Short-term plans are not held to these standards and thus are not sold in the marketplace.

As with any health insurance plan, you must apply for short-term coverage. However, unlike standard health insurance sold under ACA rules, you do not automatically qualify for coverage. You can be rejected for a number of reasons, including pre-existing health conditions, being obese, or being pregnant.

It is also important to note that some states have prohibited the sale of short-term health insurance that does not offer protections to those with pre-existing conditions. Such states include California, Massachusetts, New Jersey, and New York, according to the Kaiser Family Foundation.

Many other states have imposed restrictions on these plans. In some cases, the restrictions are severe enough that no provider offers short-term plans in those states.

How long can you have short-term health insurance?

The length of time you can have short-term insurance differs from insurer to insurer and plan to plan. In general, short-term insurance offers some coverage when you are between major medical plan policies.

So, these plans typically offer coverage for less than a year. Some providers offer coverage for three to six months, for example.

Some plans will let you renew your policy at the end of the term. However, there may be a cap on how many times you can renew. And if you become ill, the insurer may not agree to let you renew your policy.

The Kaiser Family Foundation cautions that loss of coverage through a short-term insurance plan does not qualify you for a special enrollment period as defined under the Affordable Care Act. That means that if you lose short-term health insurance coverage, you may not be eligible for health coverage until the next open enrollment period.

What is the best short-term health insurance?

Many different health insurance companies offer short-term health insurance. Some examples include:

The right health insurer for you will depend upon your needs and your circumstances. There is no one company that is “best.” Finding the right coverage is a matter of comparing and contrasting companies until you find one that best suits your situation.

How much is short-term health insurance?

Short-term health insurance typically costs far less than major medical insurance. For instance, eHealth notes that some of its plans start at $55 a month.

Of course, it’s important to remember that you get a lot less coverage with a short-term medical plan and that if you become sick or injured, you could end up paying far more in out-of-pocket costs.

What does short-term health insurance cover?

Short-term plans cover many of the same things as major medical health insurance, including:

As with traditional health insurance, you might be responsible for deductibles and copayments.

Blase notes that short-term health insurance plans tend to be accepted by more providers, offering policyholders a greater choice of doctors, than plans compliant with the Affordable Care Act.

It is also crucial to emphasize that short-term health insurance coverage may not be as robust as what you would receive with a major medical health insurance plan. There may be caps and limitations on how much coverage you receive.

For example, hospitalization coverage might be capped at a specific amount, such as $1,000 per day. For perspective, the federal government says the average three-day hospital stay costs $30,000.

Or, you might be required to pay for a percentage of the care you receive.

So, if you need more expensive care in these situations, you could be on the hook for high medical bills.

Who are short-term health insurance buyers?

Many people who purchase short-term health insurance are between jobs or have lost health insurance coverage for other reasons, but expect to get coverage again soon.

Others purchase short-term health insurance because they are fed up with paying the high premiums associated with traditional health insurance.

“Most people use little, if any, medical care during the year,” Blase says. “This coverage is great for people who are interested in real insurance, meaning protection against low-occurrence but very costly medical events or health conditions developing.”

In fact, Blase says his family was covered by short-term health insurance for most of last year.

Short-term plans also may appeal to younger or healthier people who rarely go to the doctor and thus are willing to purchase a plan with lesser coverage in hopes of saving money.

Health insurance FAQs

Is short-term health insurance worth it?

Short-term health insurance offers coverage for many medical services, and it usually does so at a cost substantially below what you would pay for a major medical health insurance plan.

However, there are important limitations to this type of coverage. For example, there may be caps on hospitalization coverage, and the plans may not cover things like prescription drugs or mental health care services.

For this reason, it is important to do a careful cost-benefit analysis before purchasing this type of plan.

Who doesn’t qualify for short-term health insurance?

Typically, you will need to answer a health questionnaire when applying for short-term health insurance. If you have a pre-existing condition, it is likely that you will not qualify for this type of coverage.

Other circumstances may disqualify you for short-term health insurance coverage. For example, you will not qualify if you are not a U.S. citizen or legal resident. You also cannot purchase one of these plans if you already are covered by another health insurance plan.

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