The term “short-term” health insurance can be a bit misleading.
Typically, you would usually seek out short-term health insurance only if they’re in between jobs or want to bridge the gap between longer-term insurance options. Maybe the insurance benefits at your new job aren’t active yet, or you just recently aged out of your parent’s insurance plan.
But in reality, short-term insurance plan coverage can last up to 36 months! That’s a longer timeframe than traditional insurance plan coverage. So the term “short-term” no longer necessarily applies to individuals that are looking for alternative options other than the Affordable Care Act or Employer coverage.
But what are the benefits of a plan like this, and why might a person stay on a short-term insurance plan for up to three years?
Benefits of Short-term Health Insurance
The main benefit of short-term insurance is its flexibility. You can apply for a short-term plan at any time of the year, not just during enrollment periods. If, for example, you leave your job and your insurance through that company ends, you can apply for a short-term insurance plan and possibly get covered as quickly as one day after you apply.
Or if you’re self employed and realize that you’re paying too much for coverage, Short Term can be a great option.
You also have a lot more flexibility with your length of coverage. Short-term plans could last as little as one month to as long as 36 months, and you can drop your coverage at any time with no penalty. You could even apply for another short-term plan after the first plan ends.
Short-term insurance plans allow you to choose just the coverage that you need. Removing coverage for maternity, mental health, substance abuse, and prescription medication, services that not everyone needs, can help you keep your monthly premiums low.
If you missed the application window for an Affordable Care Act insurance plan and you don’t qualify for Special Enrollment, short-term health insurance offers a comparably low monthly cost for your coverage.
Drawbacks of Short-term Health Insurance
Short-term insurance may not be for everybody, and other options may be more practical for you and your family.
The biggest drawback to short-term plans is that they have exclusions for pre-existing conditions. Generally, you have to qualify based on health history to apply for a short-term plan and get approved. For this reason, these plans may not be for everyone.
Short-term health insurance plans are also not mandated or standardized by the federal government. That means that the details and coverage on short-term plans can vary greatly in services and overall costs. You typically want to review your short-term contract closely so you know what you’re paying for. While these plans offer premiums that are relatively low, ACA insurance plans are generally cheaper.
Finally, as mentioned above, if you’re aged 65 and below and you frequently use your health insurance, you may find short-term insurance plans lacking. They typically have relatively high higher out of pocket costs than traditional insurance, but those can be offset by the cost savings on the monthly premium.
The Takeaway
Choosing short-term health insurance is an effective way to keep your insurance costs low while staying covered for essential health services. These kinds of plans are recommended for people under 65 that are generally healthy.
If you’re looking to keep your health insurance costs low and you are looking for something to make sure that you’re covered for major services, Short Term may be for you. You can take advantage of short-term health insurance’s flexibility and quick coverage with no enrollment window.
Private Health Insurance Means More Choices
More than anything, private health insurance gives you the freedom to decide on the insurance plan that’s best for you. You can choose as much or as little coverage as you like to keep your monthly premium within your budget.
Still not sure what insurance is best for you? Try making a list of the kinds of coverage you need in an insurance plan and speaking to a health insurance representative. This could help you decide on what questions to ask while you’re shopping around for insurance so you can be confident you’ve found the right plan for you.
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