(866) INSUBUY
(866) 467-8289
8 AM - 9 PM CST Seven Days a Week Source ID: Insubuy
(866) INSUBUY467-82898 AM - 9 PM CST Seven Days a Week

Short Term Medical Insurance Limitations

Short Term Medical Insurance Limitations

While short term medical insurance is useful for many people in a wide variety of temporary situations, it is not a substitute for ACA health insurance.

Before considering short term medical insurance plans, you should carefully consider their limitations and thoroughly understand the plan you are purchasing.

  • Not ACA Compliant

    Short term health insurance plans do not meet the minimum essential coverage (MEC) requirements under the Affordable Care Act (ACA), colloquially known as Obamacare.

  • Tax Penalty

    Having short term medical insurance does not count as having ACA compliant health insurance. Therefore, you may be subject to a tax penalty for not carrying adequate health insurance throughout the year, unless you are exempt for an official reason.

    While deciding whether you should purchase gap health insurance, consider the cost of this penalty in addition to temporary health insurance premiums.

    Even after considering the tax penalty, short term medical insurance may be more affordable because its premiums are significantly lower than ACA health insurance plans.

  • Pre-Existing Conditions

    Short term medical insurance plans don’t cover pre-existing conditions.

    The actual definition of pre-existing conditions varies by the plan.

    Generally, if you were diagnosed or treated for a condition within the past five years, that would be considered a pre-existing condition. Also, if your condition would have caused a reasonably prudent person to seek diagnosis or treatment in the past five years, that would be considered a pre-existing condition, even if it was not treated or diagnosed before the effective date of the gap medical insurance.

  • Post Claim Underwriting

    If you make a claim under short term medical insurance, the insurance company may review your health history to determine whether the condition existed prior to the effective date of the policy. If it did, the claim would be denied. This practice is called post claim underwriting.

  • Not a Guaranteed Issue

    Unlike ACA plans, you will be asked a series of medical questions before receiving coverage. Depending on the answers, you may be declined for coverage.

    Under such circumstances, some insurance companies offer a guaranteed issue version of their short term health insurance, which will not cover the medical conditions for which you were declined standard coverage. Additionally, the guaranteed issue plan costs more, provides a lower policy maximum, and has a higher out-of-pocket maximum. For some people, because some coverage is better than no coverage, the guaranteed issue plan is their only option.

    Even though the spouse and dependent children can apply with the primary applicant in the same application, each family member must be eligible for the short term plan and qualify separately with the series of medical questions.

  • Not Renewable

    Short term health insurance plans provide coverage for a brief period and are not renewable. Eventually, you will have to purchase a new insurance plan if your state allows. But, if you ran into any medical issues in the previous policy, they would be considered pre-existing conditions and would be excluded from the new policy. Moreover, depending upon the condition, you may not be eligible for a new short term medical plan.

    If you get sick or injured while on short term medical insurance and need extended treatment beyond the term of the policy, you may be out of luck. This incident would no longer be covered, and there would be no benefit period.

    Even if you develop a medical condition that prevents you from applying for another short term health insurance plan, you can still apply for ACA health insurance during open enrollment or, if you qualify, special enrollment.

  • Expiration Not a Qualifying Event

    The expiration of your short term medical insurance plan does not create a qualifying event for special enrollment into ACA health insurance. You can purchase another short term health insurance plan if you are still eligible and if your state allows. Otherwise, you will have to go without health insurance until the next open enrollment period.

    Loss of minimum essential coverage is a qualifying event that allows a special enrollment. However, short-term insurance plans are not considered minimum essential coverage.

  • Government Exchanges

    Unlike ACA compliant medical insurance plans, short term medical insurance plans are not available at government exchanges. They must be purchased from a broker and insured with a private company.

In short, temporary health insurance plans are stopgap plans just in case you were to contract a completely new medical condition or get into an accident. If you are uninsured due to ACA ineligibility, however, temporary medical insurance still provides reasonably good medical coverage at affordable premiums.

In some states, such as New York, New Jersey, Massachusetts, Rhode Island and Vermont, short term health insurance plans are unavailable.

Even though short term medical insurance plans have numerous limitations, they also have many advantages that you should review carefully before choosing a plan.

Did you know?

Prices are regulated by law.

You cannot find a lower price anywhere for the same product.

Learn More

Why purchase insurance from Insubuy®?

Same Price. Better Service.®

There are many advantages in purchasing from Insubuy® and no disadvantages.

Learn More

Visiting USA?

Healthcare costs are very high in the U.S.

Buy U.S. based visitors insurance and enjoy your trip.

Learn More

Traveling abroad?

Did you know that your insurance may not cover you abroad or that it may only provide limited coverage?

Purchase travel medical insurance that includes emergency medical evacuation.

Learn More

New immigrant to USA?

You would not be eligible to enroll in Medicare for the first 5 years.

Purchase new immigrant medical insurance to bridge the gap.

Learn More

Going on a vacation?

You could lose your non-refundable trip costs if you had to cancel your trip.

Buy a trip cancellation insurance package plan and be worry-free.

Learn More

Are you an exchange visitor to USA?

The U.S. Department of State requires all J visa holders to purchase compliant insurance.

Buy J visa medical insurance to meet your requirements.

Learn More

Traveling to Europe?

Schengen countries require most non-US citizens to purchase Schengen visa insurance.

Make an instant purchase online and get instant visa letter.

Learn More

Traveling frequently throughout the year?

You don’t need to purchase travel insurance for every trip.

Purchase annual multi trip travel insurance for your travels.

Learn More

International student in the U.S.?

Most schools require international students to purchase health insurance.

Purchase international student health insurance that meets most school requirements.

Learn More

To continue with the application please scroll down to confirm this notice

CALIFORNIA RESIDENTS SPECIAL NOTICE

1. THE INSURANCE POLICY THAT YOU ARE APPLYING TO PURCHASE IS BEING ISSUED BY AN INSURER THAT IS NOT LICENSED BY THE STATE OF CALIFORNIA. THESE COMPANIES ARE CALLED "NONADMITTED" OR "SURPLUS LINE" INSURERS.

2. THE INSURER IS NOT SUBJECT TO THE FINANCIAL SOLVENCY REGULATION AND ENFORCEMENT THAT APPLY TO CALIFORNIA LICENSED INSURERS.

3. THE INSURER DOES NOT PARTICIPATE IN ANY OF THE INSURANCE GUARANTEE FUNDS CREATED BY CALIFORNIA LAW. THEREFORE, THESE FUNDS WILL NOT PAY YOUR CLAIMS OR PROTECT YOUR ASSETS IF THE INSURER BECOMES INSOLVENT AND IS UNABLE TO MAKE PAYMENTS AS PROMISED.

4. THE INSURER SHOULD BE LICENSED EITHER AS A FOREIGN INSURER IN ANOTHER STATE IN THE UNITED STATES OR AS A NON-UNITED STATES (ALIEN) INSURER. YOU SHOULD ASK QUESTIONS OF YOUR INSURANCE AGENT, BROKER, OR “SURPLUS LINE” BROKER OR CONTACT THE CALIFORNIA DEPARTMENT OF INSURANCE AT THE FOLLOWING TOLL-FREE TELEPHONE NUMBER 1-800-927-4357. ASK WHETHER OR NOT THE INSURER IS LICENSED AS A FOREIGN OR NON-UNITED STATES (ALIEN) INSURER AND FOR ADDITIONAL INFORMATION ABOUT THE INSURER. YOU MAY ALSO CONTACT THE NAIC’S INTERNET WEB SITE AT WWW.NAIC.ORG.

5. FOREIGN INSURERS SHOULD BE LICENSED BY A STATE IN THE UNITED STATES AND YOU MAY CONTACT THAT STATE’S DEPARTMENT OF INSURANCE TO OBTAIN MORE INFORMATION ABOUT THAT INSURER.

6. FOR NON-UNITED STATES (ALIEN) INSURERS, THE INSURER SHOULD BE LICENSED BY A COUNTRY OUTSIDE OF THE UNITED STATES AND SHOULD BE ON THE NAIC’S INTERNATIONAL INSURERS DEPARTMENT (IID) LISTING OF APPROVED NONADMITTED NON-UNITED STATES INSURERS. ASK YOUR AGENT, BROKER, OR “SURPLUS LINE” BROKER TO OBTAIN MORE INFORMATION ABOUT THAT INSURER.

7. CALIFORNIA MAINTAINS A LIST OF APPROVED SURPLUS LINE INSURERS. ASK YOUR AGENT OR BROKER IF THE INSURER IS ON THAT LIST, OR VIEW THAT LIST AT THE INTERNET WEB SITE OF THE CALIFORNIA DEPARTMENT OF INSURANCE: www.insurance.ca.gov.

8. IF YOU, AS THE APPLICANT, REQUIRED THAT THE INSURANCE POLICY YOU HAVE PURCHASED BE BOUND IMMEDIATELY, EITHER BECAUSE EXISTING COVERAGE WAS GOING TO LAPSE WITHIN TWO BUSINESS DAYS OR BECAUSE YOU WERE REQUIRED TO HAVE COVERAGE WITHIN TWO BUSINESS DAYS, AND YOU DID NOT RECEIVE THIS DISCLOSURE FORM AND A REQUEST FOR YOUR SIGNATURE UNTIL AFTER COVERAGE BECAME EFFECTIVE, YOU HAVE THE RIGHT TO CANCEL THIS POLICY WITHIN FIVE DAYS OF RECEIVING THIS DISCLOSURE. IF YOU CANCEL COVERAGE, THE PREMIUM WILL BE PRORATED AND ANY BROKER’S FEE CHARGED FOR THIS INSURANCE WILL BE RETURNED TO YOU.

07/11
LSW1146D

Cuba Notice

Travel to Cuba remains subject to restrictions imposed by U.S. sanctions, administered by the US Treasury. Only those who qualify for travel authorized under US Treasury's regulations and who comply with the terms of such authorization can legally travel to Cuba. Individuals traveling to Cuba must meet the following criteria in order to qualify for travel authorized under one of the general licenses outlined below:

Criteria for travel authorized by the US Treasury

If you have read and agree to the terms of both Notices: California and Cuba, please click the continue button if you wish to complete the application process. Otherwise, please click cancel to abort the application process.

To continue with the application please scroll down to confirm this notice

CALIFORNIA RESIDENTS SPECIAL NOTICE

1. THE INSURANCE POLICY THAT YOU ARE APPLYING TO PURCHASE IS BEING ISSUED BY AN INSURER THAT IS NOT LICENSED BY THE STATE OF CALIFORNIA. THESE COMPANIES ARE CALLED "NONADMITTED" OR "SURPLUS LINE" INSURERS.

2. THE INSURER IS NOT SUBJECT TO THE FINANCIAL SOLVENCY REGULATION AND ENFORCEMENT THAT APPLY TO CALIFORNIA LICENSED INSURERS.

3. THE INSURER DOES NOT PARTICIPATE IN ANY OF THE INSURANCE GUARANTEE FUNDS CREATED BY CALIFORNIA LAW. THEREFORE, THESE FUNDS WILL NOT PAY YOUR CLAIMS OR PROTECT YOUR ASSETS IF THE INSURER BECOMES INSOLVENT AND IS UNABLE TO MAKE PAYMENTS AS PROMISED.

4. THE INSURER SHOULD BE LICENSED EITHER AS A FOREIGN INSURER IN ANOTHER STATE IN THE UNITED STATES OR AS A NON-UNITED STATES (ALIEN) INSURER. YOU SHOULD ASK QUESTIONS OF YOUR INSURANCE AGENT, BROKER, OR “SURPLUS LINE” BROKER OR CONTACT THE CALIFORNIA DEPARTMENT OF INSURANCE AT THE FOLLOWING TOLL-FREE TELEPHONE NUMBER 1-800-927-4357. ASK WHETHER OR NOT THE INSURER IS LICENSED AS A FOREIGN OR NON-UNITED STATES (ALIEN) INSURER AND FOR ADDITIONAL INFORMATION ABOUT THE INSURER. YOU MAY ALSO CONTACT THE NAIC’S INTERNET WEB SITE AT WWW.NAIC.ORG.

5. FOREIGN INSURERS SHOULD BE LICENSED BY A STATE IN THE UNITED STATES AND YOU MAY CONTACT THAT STATE’S DEPARTMENT OF INSURANCE TO OBTAIN MORE INFORMATION ABOUT THAT INSURER.

6. FOR NON-UNITED STATES (ALIEN) INSURERS, THE INSURER SHOULD BE LICENSED BY A COUNTRY OUTSIDE OF THE UNITED STATES AND SHOULD BE ON THE NAIC’S INTERNATIONAL INSURERS DEPARTMENT (IID) LISTING OF APPROVED NONADMITTED NON-UNITED STATES INSURERS. ASK YOUR AGENT, BROKER, OR “SURPLUS LINE” BROKER TO OBTAIN MORE INFORMATION ABOUT THAT INSURER.

7. CALIFORNIA MAINTAINS A LIST OF APPROVED SURPLUS LINE INSURERS. ASK YOUR AGENT OR BROKER IF THE INSURER IS ON THAT LIST, OR VIEW THAT LIST AT THE INTERNET WEB SITE OF THE CALIFORNIA DEPARTMENT OF INSURANCE: www.insurance.ca.gov.

8. IF YOU, AS THE APPLICANT, REQUIRED THAT THE INSURANCE POLICY YOU HAVE PURCHASED BE BOUND IMMEDIATELY, EITHER BECAUSE EXISTING COVERAGE WAS GOING TO LAPSE WITHIN TWO BUSINESS DAYS OR BECAUSE YOU WERE REQUIRED TO HAVE COVERAGE WITHIN TWO BUSINESS DAYS, AND YOU DID NOT RECEIVE THIS DISCLOSURE FORM AND A REQUEST FOR YOUR SIGNATURE UNTIL AFTER COVERAGE BECAME EFFECTIVE, YOU HAVE THE RIGHT TO CANCEL THIS POLICY WITHIN FIVE DAYS OF RECEIVING THIS DISCLOSURE. IF YOU CANCEL COVERAGE, THE PREMIUM WILL BE PRORATED AND ANY BROKER’S FEE CHARGED FOR THIS INSURANCE WILL BE RETURNED TO YOU.

07/11
LSW1146D

If you have read and agreed to the terms of this notice and wish to continue, please click the continue button. Otherwise, please click cancel to abort the application process.

Cuba Notice

Travel to Cuba remains subject to restrictions imposed by U.S. sanctions, administered by the US Treasury. Only those who qualify for travel authorized under US Treasury's regulations and who comply with the terms of such authorization can legally travel to Cuba. Individuals traveling to Cuba must meet the following criteria in order to qualify for travel authorized under one of the general licenses outlined below:

Criteria for travel authorized by the US Treasury

I certify that I have read the above and that all individuals applying for coverage qualify for travel authorized under one of the general licenses per US Treasury regulations.

Reset Application

Pressing “CONFIRM” will reset the whole application and erase all the data previously entered.

If you have already saved this application, you will still be able to retrieve the application with the information previously entered. Details for retrieval would have been given at the time of saving, which can be done any time after the initial quote.