Short term medical insurance, also called temporary health insurance or term health insurance, is offered for a specific duration (30 days to 12 months) and is designed to bridge the gap in your healthcare coverage while you are in transition.
Short term medical insurance is useful to a wide variety of people in many situations:
- Between jobs - If you have been laid off and you're looking for a new job, your budget may be tight, but medical emergencies can happen at any time. You should consider purchasing short term health insurance, just in case.
- Missed open enrollment for ACA compliant health insurance and don't qualify for Special Enrollment
- Has a waiting period before being eligible to enroll in health insurance at new job
- Waiting for ACA compliant health insurance to begin
- Early retirees under the age of 65 years who are in overall good health
- In need of short term alternative to COBRA insurance
- Young retirees who have recently left employer-sponsored health insurance and are waiting for enrollment in Medicare
- New immigrants to the USA - Until finding job that offers employer-sponsored health insurance, or enrolling in an ACA compliant plan during open enrollment, new immigrants to the USA should consider purchasing short term health insurance.
- Lost coverage due to divorce or death of spouse
- Recent graduates including international students on OPT
- Rolling off parents' health insurance due to aging out or other reasons - Once you graduate, you may no longer be eligible for school insurance or your parents' insurance. Consider purchasing short term medical insurance until you find a job that provides long term health insurance.
- Part-time or temporary workers whose employer does not provide health insurance
- Obamacare is unavailable in your area
- Your preferred physician or hospital does not accept ACA health insurance plans
- Temporary workers and their dependents
- International students studying in US schools
- US citizens returning to the US after living abroad
Due to their limitations, short term health insurance is not a substitute for ACA compliant health insurance. However, for many people, short term health insurance is the best option until they are eligible for ACA health insurance. You should carefully compare gap health insurance with ACA or Obamacare health insurance before purchasing.
Short term medical insurance plans are available to individuals under the age of 65 years. They are available for a minimum of 30 days, regardless of the number of days you need temporary coverage.
Even though short term medical insurance plans are limited to a maximum of 364 days, some insurance companies allow you to renew your coverage up to 36 months in most states. Some states may have a shorter initial duration but allow for renewal after the initial coverage ends or multiple short term plan purchases in the same application so that you will have coverage for a longer duration. Even though pre-existing conditions are excluded from the effective date of the first policy, your deductible and coinsurance will start over with each policy. You will have a different policy number and insurance card with each policy. If you sign up for a policy and determine later that you no longer need it, you can cancel it to avoid charges from the next month onward.
As long as it is a new condition, injury or accident that occurs after the policy's effective date, short term medical insurance provides many benefits such as:
- Physician visits, including specialists
- Lab tests
- Emergency care
- Ambulance service
- And more
However, short term medical insurance plans don't cover maternity. Prescription drugs may not be covered or are covered up to a limited amount. Short term health insurance plans don't cover pre-existing conditions.
If you choose short term health insurance over COBRA, you will not be able to get back into a COBRA plan after short term medical insurance expires.
Children under the age of 18 years (26 years if enrolled full-time in an accredited school or college) and spouses can be listed in the same application as the primary applicant. However, each member in the application must qualify separately for the medical questions asked.
Most short term health insurance plans allow you to purchase insurance for children only up to a certain age, which can be two weeks, two months or two years. Some insurance companies allow one application for multiple children by listing the eldest child as the primary applicant.