A complete guide to short-term health insurance

Shivani Gite is a personal finance and insurance writer with a degree in journalism and mass communication. She is passionate about making insurance topics easy to understand for people and helping them make better financial decisions.

Nupur Gambhir is a content editor and licensed life, health, and disability insurance expert. She has extensive experience bringing brands to life and has built award-nominated campaigns for travel and tech. Her insurance expertise has been featured in Bloomberg News, Forbes Advisor, CNET, Fortune, Slate, Real Simple, Lifehacker, The Financial Gym, and the end-of-life planning service.

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If you’re between jobs or have a gap in your health insurance coverage, you might want to consider purchasing short-term health insurance. Short-term health insurance is a temporary plan that provides coverage when you don’t have a standard policy.

One of the biggest benefits of a short-term health insurance plan is that it’s typically cheaper than a regular plan. If you need temporary coverage and are in good health, short-term coverage is a good option.

However, short-term health insurance has its limitations and shouldn’t be a long-term solution. These plans usually have restricted benefits, leading to high out-of-pocket costs when you need certain types of medical care. Also, if you have pre-existing conditions, you may not qualify for short-term health insurance.

If you’re considering short-term health insurance, it’s important to first weigh the pros and cons. What follows is some key information about short-term health insurance coverage, how much it costs, and what alternatives are available.

Key Takeaways

What is short-term health insurance?

Short-term health plans are low-cost, low-coverage plans.

These plans are available in most states for up to one year with the option to extend the plans twice. In effect, you could have a short-term plan for three years. That’s unlike regular health insurance, which has an annual renewal period.

A good way to think of short-term plans is that they’re temporary health insurance with lower premiums, higher out-of-pocket costs and less coverage than a standard health plan.

How does short-term health insurance work?

Short-term health insurance plans are designed to cover individuals for a limited period. These plans do not have an open enrollment period like ACA plans. You can enroll in a short-term health insurance plan anytime during the year if you need coverage.

Short-term or temporary health insurance plans are often used by people who are between jobs or waiting for their employer-sponsored health insurance to begin. 

Unlike traditional health insurance plans, which generally offer comprehensive benefits, short-term plans provide less coverage. They do not cover pre-existing conditions, routine medical needs or maternity coverage. As a result, these plans are less robust than traditional health insurance. 

Individuals considering a short-term health insurance plan should carefully examine their needs and consider all of their options before enrolling in a plan.

What does a short-term health plan cover?

Short-term health plans generally include: 

“In many cases, short-term health insurance plans cover the same services as major medical plans,” says Chris Foley, a licensed health insurance broker with Abbot Benefits Group. “However, you need to be careful when comparing policies. Some short-term health insurance plans exclude certain preventive care services, which can be very limiting.”

What doesn’t a short-term health plan cover?

When shopping for temporary health plans, you should also find out what is not covered. This will differ with every plan, but here are several services that usually are not part of short-term health plans:

Because maternity care is not automatically covered under a short-term plan, short-term health insurance might not be the best option for people who are looking to start a family. However, it’s possible that some plans will cover pregnancy and postpartum care — it just depends on your specific plan. You can also look into ACA plans that cover pregnancy and maternity care as essential health benefits. 

How much does a short-term health plan cost?

You can find a short-term health insurance plan for less than $100 a month, which is significantly less than the average of more than $400 for unsubsidized ACA-compliant health plans.

“Short-term health insurance is almost always cheaper than a standard plan,” Foley says.

However, Betsy Imholz, special projects director at Consumers Union, says that premiums are just one piece of a financial puzzle. You must also look at a plan’s deductibles, copays, coinsurance and dollar limits and exclusions of services that aren’t covered in short-term plans.

You may find that a low-cost, short-term medical plan may actually cost you more than an individual health insurance plan in the long run.

How long will my short-term coverage last?

Most states allow you to have a short-term health plan anywhere from a month to two years.

States that forbid the sale of short-term plans include:

Other states have regulations that restrict short-term plans beyond the federal rules:

Also, some states allow short-term plans, but no companies offer short-term plans in those states. Rhode Island is one state that allows short-term health insurance, but no companies currently offer plans there.

What is the best short-term health insurance?

The best short-term health insurance for you depends on your specific needs.

Major health insurance companies like UnitedHealthcare offer short-term plans. Other short-term plans come from smaller insurers like Everest, Pivot Health and National General.

Companies don’t offer short-term health plans in all states, so dig into the fine print to see what’s covered and what’s not covered by each plan.

Make sure to compare policies from different insurers. Not all companies offer the same coverage, so it’s important to shop around to get the best deal on your short-term health insurance plan. 

How to get short-term health insurance

Some major health insurers, such as UnitedHealthcare, offer short-term plans, but that coverage differs from regular health insurance. Just because a big-name insurer offers a short-term plan doesn’t mean that the plan provides full health insurance coverage. It’s not always easy to distinguish between plans, so reading the fine print is critical.

“One thing consumers can do is to ask the agent or company for a Summary of Benefits and Coverage, which is a standardized form required for (Affordable Care Act) plans to help people compare plans. If there is not one available, that’s an indicator that it’s not an ACA-protected plan,” Imholz says.

Who qualifies for short-term health insurance?

Most states allow short-term health plans, but some states ban the plans while others limit the length of the coverage.

However, even if your state allows short-term plans, an insurance company can still reject you based on your health. “If you have been diagnosed with a major medical condition or are currently pregnant, you may not qualify for short-term health insurance,”  Foley says.

Here’s who may benefit from a short-term health plan:

People with pre-existing conditions like asthma or diabetes should avoid short-term plans because they will pay significantly higher premiums. However, this isn’t always an option if you need medicine. If you are denied coverage because of a pre-existing condition, you can get a pre-existing condition insurance plan under ACA, which covers primary and specialty care, hospital care and prescription drugs. Check out the Centers for Medicare & Medicaid Services site for more details. 

However, a short-term plan is better than no plan at all.

Pros and cons of short-term health insurance

There are a number of factors to consider when deciding whether or not to purchase short-term health insurance. 

These plans help bridge a gap between standard health insurance, such as if you’re between jobs and don’t want to pay the high costs of COBRA. 

Here are the pros and cons of short-term health insurance:

Alternatives to short-term health insurance

An indemnity plan is an alternative to a standard health insurance plan with a network of providers, such as preferred provider organization (PPO) and health maintenance organization (HMO) plans.

With an indemnity plan, you as the member decide on which doctors and hospitals to visit. The health insurance company pays part of the total cost.

How does an indemnity plan compare to a short-term health plan? Let’s look at how they’re similar and how they’re different.

Frequently Asked Questions

Can you buy health insurance for one month?

Yes, companies offer short-term health insurance plans for a month.

Short-term plans are meant as a temporary way to get coverage. It’s not meant as a long-term health insurance solution.

Is short-term health insurance worth it?

Whether short-term health insurance is worth it depends on your health, how much you need health care and what you want from a health plan.

If you’re healthy, don’t often see a doctor and aren’t on prescription drugs, a short-term health insurance plan may work for you. Short-term plans have low premiums, so that might interest you.

However, remember that short-term insurance has limited coverage, so you’ll pay more out-of-pocket when you need care.

What states allow short-term health insurance?

Most states allow short-term health insurance.

States that forbid the sale of short-term plans include California, Hawaii, Massachusetts, New Jersey and New York. Other states allow plans, but for a limited time, such as six months.

Some states allow temporary health insurance plans, but no companies offer short-term plans in those states.

How quickly can I get coverage?

There isn’t a long waiting period with short-term insurance.

You fill out the application and the company reviews the form and decides whether to accept you. After that, you can get coverage within days — even within 24 hours after paying your first premium.

Sources:

Centers for Medicare & Medicaid Services. “Pre-Existing Condition Insurance Plan.” Accessed August 2022.

eHealth.“Short-Term Health Insurance.” Accessed September 2022.

Cigna. “What is Short-Term Health Insurance?” Accessed September 2022.

Shivani Gite is a personal finance and insurance writer with a degree in journalism and mass communication. She is passionate about making insurance topics easy to understand for people and helping them make better financial decisions.

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