Short Term Health Insurance

What Is Short Term Health Insurance?

Short term health insurance, also known as temporary health insurance or gap coverage, keeps you protected while you’re between health insurance plans. Short term health insurance plans may not be right for everyone, but there are definitely circumstances where short term plans can pay off.

When Would You Need Short Term Health Insurance?

Short term health insurance doesn’t provide the comprehensive health coverage that most people are looking for, so it shouldn’t be your first option. However, if any of the following apply to you, then you should seriously consider enrolling in short term coverage.

  • You are between jobs and lost your employer-sponsored health coverage.
  • You have enrolled in a health insurance plan but are currently in your waiting period, and your coverage hasn’t kicked in.
  • You missed out on signing up for health insurance through the marketplace during the Open Enrollment Period but haven’t had a qualifying life event.
  • You are looking to get coverage for you or your family fast.
  • If you are in good health, and other health insurance options are too expensive.

Short term health insurance plans are ideal if you find yourself in any of these situations, but remember they are called temporary health insurance plans for a reason.

How Short Health Insurance Works

Short term health insurance works just like any other health insurance plan would. First, you find the short term health plan you want and enroll. Once enrolled, you pay a monthly premium. Essentially, your monthly premium is the payment you make that gives you access to a network of providers who offer negotiated rates.

Graphic how short term health insurance works

Even though you pay a monthly premium, you will still be required to pay some out-of-pocket expenses. With short term plans, out-of-pocket expenses tend to cost more than with traditional health insurance plans. Aside from your monthly premium, you will be paying for deductibles, copayments, and coinsurance costs that can add up quickly.

How Much Will Short Term Health Insurance Cost You?

Short term health insurance plans usually cost an average of $110, but you can expect prices to vary depending on coverage. It is safe to assume that the average cost of short term health insurance will be significantly cheaper than traditional health insurance, but there are trade-offs to consider. Short term coverage may be cheaper, but it doesn’t offer the extensive cover you may desire.

Short term health insurance prices are typically dependant on the following factors, where you live, how long you are looking to stay covered, and the out-of-pocket expenses you are willing to take on. Using First Quote Health is the easiest way to shop for and compare short term health insurance quotes in your area.

Graphic short term health insurance cost factors

How To Use Your Short Term Coverage

There is no difference between how you use short term health insurance and traditional health insurance. Once you are covered, you will receive a policy number from your short term health insurance company, along with a coverage card. Just present either to your medical service provider and in most cases, all claims will be filed directly with your health insurance provider.

Find Out If Your Doctor Accepts Your Coverage

Most medical providers will accept short term health insurance plans, but you can find out whether or not your current doctor accepts your coverage by talking to your short term provider. Keep in mind, if you opt to get short term coverage from a large provider like United Healthcare, you will have access to a network of over 1 million licensed physicians.

How Long Does Short Term Health Insurance Last?

Short term health insurance plans are only temporary, so you won’t be able to find plans that last longer than 12 months or 1 year. The exact length of your short term policy will be up to you. Typically, short term plans last between 30 days to 1 year, it really depends what you’re looking for. If you are using a short term plan as gap coverage while you aren’t insured, just choose the length of time until your major medical plan kicks in.

Graphic short term health insurance duration

Can You Extend Short Term Plans?

Unfortunately no, you don’t have the option to extend your short term coverage. Short term health insurance plans only last the amount of time specified at the time of enrollment. Again, these plans are considered temporary health insurance plans or gap coverage, they aren’t designed to keep you covered long term. Once your coverage ends, you will be able to enroll in a new short term health insurance plan.

Can You Cancel Short Term Plans?

Yes, you can cancel or drop your short term health insurance plan whenever you want. What’s even better is that most health insurance companies will allow you to drop short term coverage without any penalties. Some will even reimburse you for premiums you have paid and didn’t get the chance to use.

Do Short Term Health Insurance Plans Qualify Under Obamacare?

No, short term health insurance will typically not be considered qualified health plans, or major medical plans. When the Affordable Care Act was passed, it required every American to enroll in a health plan that covered the 10 essential benefits which you can read about here.

Short term health insurance plans are traditionally lower quality plans that don’t cover much of the minimum essential benefits. So even if you find an affordable short term health insurance plan, you may still be paying the tax penalty for not having health insurance, or have an unqualified health plan.

How Long Can You Go Without Health Coverage?

When the Affordable Care Act passed, it allowed you to go without health coverage for two consecutive months before you would have to pay a tax penalty. However, As part of President’s Trump executive order, that number switched to three consecutive months, but it’s never really a good idea to go without health coverage for too long.

What’s The Penalty For Not Having Health Insurance?

The penalty for not having health insurance can be pretty significant. You will pay one of the following:

  • 2.5% of your household income with a maximum penalty equal to the average price of a Bronze Plan through the marketplace.
  • A penalty of $695 per adult and $347.50 per child with a maximum penalty of $2,085.

You will end up paying whichever amount is higher between the two. First Quote Health has an easy to use Tax Penalty Calculator that lets you calculate what your penalty will be for the year you are filing for. It’s free to use and doesn’t require you to input any personal information.

The Pros And Cons Of Short Term Health Insurance

Whenever you are about to make a big purchase, especially one that will determine the level of medical care you and your family will have access to, it’s important to weigh the pros and cons. While short term health insurance does have its advantages, there are some drawbacks that you want to consider before making any decisions.

Graphic short term pros cons

Pros Of Short Term Health Insurance

  • You are covered: There’s no bigger advantage to any health plan that knowing that you are protected in the event of a medical emergency.
  • Short term plans are generally more affordable: If you are struggling to find health insurance that fits your budget, short term coverage can help.
  • You can get coverage fast: How fast? Some short term health insurance plans let you sign up for coverage the same day, so you don’t have to worry about long waiting periods.
  • Rate stability: Most temporary health insurance plans will keep you locked in at the rate you sign up with.
  • **You aren’t limited to Open Enrollment:**Unlike marketplace plans, you can sign up throughout the year, and don’t have to wait until the marketplace opens.

Cons Of Short Term Health Insurance

  • No comprehensive coverage: Short term health insurance plans aren’t designed to be your primary health insurance plan, so you may be missing out on some benefits like preventive care services.
  • Paying a tax penalty: Since short term plans don’t count as qualified health coverage, you will be paying a tax penalty on top of your monthly premiums unless you qualify for an exemption.
  • No federal subsidies or premium tax credits: Temporary health insurance isn’t offered through the health insurance exchange, which is the only way you would be eligible for subsidized coverage.
  • You can’t renew your short term plan: Once your plan expires, you will have to find new coverage.
  • No protection for pre-existing conditions: Unlike marketplace plans, you can be denied coverage for pre-existing conditions. Gap health insurance doesn’t play by the same rules as most other qualified health plans. So if you have a medical history, these plans can end up being a nightmare for you.

What Are The Best Short Term Plans?

It depends on your situation. Different health insurance companies offer different levels of coverage. What you want is a plan that has an extensive provider network. The last thing you want is to enroll in temporary health insurance that only lasts a few months and makes you find a new doctor.

Next, you want to sit down and determine how much you are willing to pay. Finding affordable short term health insurance plans are easy, but if you’re just looking at the price of your monthly premium, you could be setting yourself up for higher out-of-pocket costs down the road. If you know you have a medical history that will require frequent trips to the doctor’s office, make sure to opt for a low deductible plan.

Your best bet is to work with an independent health insurance broker or agent who can help you find gap health insurance that fits your needs.

Where To Find Short Term Health Insurance Plans

You can find short term health insurance plans just about anywhere, with the exception of the health insurance marketplace. Most of the major health insurance companies offer short term coverage options, which is good news for you because it means you get a more extensive network of health providers.

Your best bet is to start your search online. The internet offers tons of resources that make shopping cover gap health insurance easier than ever. You can read reviews on short term plans to see what others are saying about the current coverage they have, along with comparing plans and pricing side by side.

Short Term Health Insurance Quotes

You have two options when searching for health short term health insurance quotes. You can browse through different company websites and see what they have to offer, or you can use free comparison sites like First Quote Health.

First Quote Health makes finding short term health insurance quotes easy by working with a wide range of independent health insurance brokers and agents who are licensed in your area. These health insurance professionals will help you find the most affordable short term health insurance plans in your area, and make sure all your medical needs are met.

FAQs

Does Short Term Health Insurance Cover Prescriptions?

That depends on the coverage you choose. Some short term health insurance plans will cover your prescriptions but may charge you higher premiums. Others may not cover your prescription medication at all. Consult with your agent, broker, or provider to find out exactly what is and isn’t covered under your policy.

Does Short Term Health insurance Cover Preventive Services?

This is dependent on your coverage. Most short term health insurance plans won’t cover preventive services because they are ultimately used to fill in the gap while you’re in coverage. If you opt for higher quality, more expensive short term coverage you may have limited preventive services covered.

Can You Get Short Term Coverage For Your Whole Family?

Yes. Short term health insurance can either be purchased for you or your family. There is no limit to the number of members you can include in your policy.

Do You Need To Pick A Primary Care Physician (PCP)?

Since you are enrolling in a temporary health insurance plan you won’t have to pick a primary care physician. You will be able to schedule appointments with any qualified physician in your network.