Haris Ashley
Short-term health insurance plans are a temporary solution for those who are between long-term insurance plans or need coverage outside of open enrollment periods. They are not available through the Health Insurance Marketplace and do not conform to Affordable Care Act (ACA) guidelines. They also do not qualify for ACA government subsidies. Short-term plans are not a good substitute for comprehensive health insurance plans as they provide limited benefits with generally much higher costs and can deny coverage for pre-existing conditions. They are also not available in all states and companies. Medicaid, on the other hand, is a federal health insurance program that provides coverage for those who qualify. So, does short-term insurance come under Medicaid?
| Characteristics | Values |
|---|---|
| Purpose | Temporary medical coverage when you are between health plans, outside enrollment periods, or need coverage in case of an emergency |
| Enrollment | You can enroll at any point throughout the year |
| Coverage | Coverage varies depending on the plan and the insurance company. Coverage may include emergency care, hospitalization, prescriptions, and routine preventive care visits. |
| Pre-existing conditions | May disqualify you from obtaining coverage |
| Cost | Monthly premiums vary depending on location, age, gender, medical history, insurance carrier, and other factors. May be less than $200 or $100 per month. |
| Limitations | May have a waiting period before receiving benefits, high deductibles, copayments, and coinsurance. May not cover essential health services such as prescription drugs, preventive screenings, maternity care, emergency services, hospitalization, pediatric care, and physical therapy. |
| Medicaid recipients | May not qualify for short-term insurance |
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What You'll Learn
Short-term insurance is not Medicaid
Purpose and Coverage:
- Medicaid: This is a federal and state-funded health insurance program that provides comprehensive and long-term medical coverage for eligible individuals. It is designed to ensure that people from low-income households, pregnant women, children, individuals with disabilities, and older adults can access affordable healthcare. The coverage includes a wide range of essential health benefits, such as preventive care, maternity care, mental health services, prescription drugs, and more.
- Short-term Insurance: These are temporary health plans designed to fill short gaps in coverage. They are not meant to be a substitute for traditional, long-term insurance plans. These plans offer limited coverage for a specified period, typically less than a year, and may not cover pre-existing conditions. Common coverage areas include emergency care, hospitalization, doctor visits, and, in some cases, prescriptions or routine preventive care.
Eligibility:
- Medicaid: Eligibility for Medicaid is based on financial need and specific criteria set by federal and state guidelines. Factors such as income, household size, age, disability status, and pregnancy status are considered. Individuals with certain pre-existing conditions may also qualify for Medicaid.
- Short-term Insurance: Almost anyone can qualify for short-term insurance, regardless of income, immigration status, or employment status. However, individuals with pre-existing conditions may face limitations or be disqualified from coverage. Short-term insurance typically requires a health questionnaire and disclosure of medical history, which insurers use to determine eligibility and coverage.
Cost and Benefits:
- Medicaid: As a government-funded program, Medicaid provides comprehensive benefits at little to no cost to the enrollee. While specific benefits may vary by state, Medicaid generally covers a broad range of essential health services.
- Short-term Insurance: These plans tend to have lower monthly premiums compared to ACA-compliant plans but may result in higher out-of-pocket costs due to higher deductibles, copayments, and coinsurance. They do not qualify for ACA government subsidies, and the coverage is generally more limited. Short-term plans may have benefit caps and often do not cover essential health services like prescription drugs, maternity care, or mental health services.
Enrollment Period:
- Medicaid: Enrollment for Medicaid is typically open year-round, and individuals can apply and qualify at any time if they meet the eligibility criteria.
- Short-term Insurance: These plans are available outside the annual open enrollment periods of traditional insurance plans. They offer flexibility and can be purchased at any point during the year to fill temporary gaps in coverage.
In summary, short-term insurance is not Medicaid. Short-term insurance serves as a temporary solution for individuals who need coverage between long-term plans or are outside of the open enrollment period. It provides limited benefits and may not cover pre-existing conditions. On the other hand, Medicaid is a comprehensive, long-term health insurance program for eligible individuals, offering a wide range of essential health services at little to no cost.
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Short-term insurance is temporary, limited coverage
Short-term insurance is a temporary, limited coverage option for those who are between health plans or outside enrollment periods. It is important to note that short-term insurance is not a substitute for comprehensive health insurance and has significant limitations in coverage.
Short-term insurance, also known as short-term limited duration health insurance (STLD), is designed to fill temporary gaps in coverage. For example, an individual transitioning between health coverage offered by different employers may benefit from STLD. Typically, STLD policies provide coverage for less than 365 days, with the possibility of renewals or extensions. However, the maximum coverage period has been limited to four months, including any renewals or extensions.
STLD insurance is not considered comprehensive health insurance and does not offer the same level of coverage as traditional comprehensive health insurance plans. One of the critical limitations of STLD plans is their ability to deny coverage to individuals with pre-existing conditions. Additionally, many STLD plans do not cover specialist visits or hospital stays, which are typically included in comprehensive health insurance.
The cost of short-term insurance is generally lower than that of ACA-compliant major medical insurance policies. However, it is important to note that short-term plans have higher upfront costs, including premiums, deductibles, coinsurance, and copays. These costs can vary depending on the level of coverage, the types of services covered, and the insurance company providing the plan.
While short-term insurance can provide temporary coverage, it is essential to carefully consider the limitations and ensure that you fully understand the types of care and services that are covered and excluded.
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It is not ACA-compliant and has fewer benefits
Short-term health insurance is a temporary solution for those who are between health plans or outside enrollment periods. It is important to note that short-term health insurance is not ACA-compliant and has fewer benefits than traditional, ACA-compliant plans.
ACA-compliant plans are required to provide certain levels of coverage, including essential health benefits such as maternity and preventive care, mental health and substance use benefits, and more. On the other hand, short-term health insurance plans are not required to meet these same standards and can deny coverage for pre-existing conditions. They also have more benefit limitations and gaps in coverage for essential health categories. For example, short-term plans may not cover essential health services such as prescription drugs, preventive screenings, maternity care, emergency services, hospitalization, pediatric care, and physical therapy.
The monthly premiums for short-term health insurance can vary depending on factors such as location, age, and insurance company. While short-term plans tend to be less expensive than ACA-compliant plans, they also provide less coverage. Additionally, premium subsidies are not available for short-term policies, and there is no cap on out-of-pocket expenses. Short-term plans also tend to have high deductibles, copayments, and coinsurance.
It is crucial to carefully review the details of any short-term health insurance plan before enrolling, as these plans can vary greatly in terms of cost and coverage. Understanding your own healthcare needs and ensuring continuous coverage during transitional periods is essential when considering short-term health insurance.
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It may not cover pre-existing conditions
Short-term health insurance plans are typically not good substitutes for traditional health plans. They are limited-duration policies that provide temporary medical coverage when you are between health plans and are not meant to be long-term solutions. They are not required to comply with Affordable Care Act (ACA) guidelines and do not have to cover pre-existing conditions.
Short-term health plans can deny you coverage if you have a pre-existing condition. They can also require you to pay more for your plan due to pre-existing conditions or not cover costs related to your pre-existing conditions. If you end one term on a short-term plan and then begin another, you may lose coverage for certain conditions that become pre-existing conditions. In some cases, you cannot extend your short-term coverage or buy another short-term plan when your coverage ends.
Medicaid, on the other hand, has always provided coverage for people with pre-existing conditions, even before the passage of the ACA. Eligibility for Medicaid prior to the ACA was based on income and other categorical criteria, not health status. If a person met these eligibility criteria, states could not deny Medicaid coverage, even with a pre-existing condition. The expansion of Medicaid under the ACA further extended coverage to millions of adults without regard to pre-existing conditions.
All Marketplace plans, including Medicaid, must cover treatment for pre-existing medical conditions. No insurance plan can reject you, charge you more, or refuse to pay for essential health benefits for any condition you had before your coverage started. Once enrolled, the plan cannot deny coverage or raise rates based on your health.
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It is not available in all states
Short-term health insurance is not available in all states. As of 2025, insurance companies are prohibited from selling short-term limited duration (STLD) insurance policies to residents of Illinois.
STLD insurance is not comprehensive health insurance and does not offer full coverage. Insurers can deny coverage to consumers with pre-existing conditions, and many STLD plans do not cover specialist visits or hospital stays. Federal rules will reinforce existing state law prohibiting STLD policy issuers from "stacking" policies, meaning that an issuer cannot sell multiple STLD insurance policies to a consumer within a 12-month period.
In addition to providing less care, short-term plans are not eligible for ACA government subsidies. They are also not required to provide full comprehensive coverage under the Affordable Care Act. This temporary, limited policy offers fewer benefits and federal protections compared to more comprehensive health insurance options available on HealthCare.gov. It may exclude coverage for pre-existing conditions such as diabetes, cancer, stroke, arthritis, heart disease, and mental health and substance use disorders.
Short-term health insurance is a type of health plan that can provide temporary medical coverage when you are between health plans, outside enrollment periods, or facing a gap in coverage. It is important to note that short-term health plans are not required to cover the ACA's essential health benefits. Therefore, in most states where short-term health plans are available, the available plans tend to have more benefit limitations than ACA-compliant plans and gaps in their coverage for essential health benefit categories.
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Frequently asked questions
Short-term health insurance is a type of health plan that can provide temporary medical coverage when you are between health plans, outside enrollment periods, or need coverage in case of an emergency.
Short-term health insurance plans are not required to comply with Affordable Care Act (ACA) guidelines and therefore do not have to provide the minimum essential coverage that ACA plans do. They can also reject your application based on your medical history. However, many plans cover emergency care and hospitalization, while some cover prescriptions or routine preventive care visits.
Almost anyone can qualify for short-term health insurance, regardless of income, immigration status, or employment status. To apply, you must complete a health questionnaire detailing your medical history and listing any pre-existing conditions. Based on your responses, your insurer may disqualify you from obtaining coverage.
No, short-term insurance is separate from Medicaid. If you are eligible for Medicaid or other government programs, you may not qualify for short-term insurance.
