Understanding The Criteria: Unlocking Short-Term Insurance Eligibility

Short-term health insurance is a temporary coverage option for those who don't have a standard health insurance policy. It is often used by people who are between jobs or waiting for their employer-sponsored health insurance to begin. Short-term health insurance is also ideal for those who missed the open enrollment period for traditional health plans or require quick proof of insurance for a trip. This type of insurance is typically offered by private insurance companies and provides coverage for a limited period, usually up to a year. While short-term health insurance offers lower premiums, it may not cover prescription drugs, maternity care, or pre-existing conditions. To qualify for short-term health insurance, individuals need to meet age requirements, typically between 18 and 65, and complete a health questionnaire.

Missed open enrollment

Missing the open enrollment period can have serious consequences, including being left without health insurance coverage until the next open enrollment period. This can put you at risk of a significant financial burden in the event of unexpected illness, injury, or a catastrophic medical bill.

If you already have an existing plan, missing open enrollment means that you'll be stuck with your current plan, even if it is no longer affordable or does not meet your needs.

If you missed open enrollment, you may also be unable to purchase health insurance at all, especially if you have a pre-existing medical condition.

Missing open enrollment may also lead to financial penalties. The Affordable Care Act (ACA) requires most individuals to have health insurance coverage, and those who do not may be subject to a tax penalty.

However, there are some exemptions and alternatives if you missed open enrollment:

Special Enrollment Period

Certain life events qualify you for a special enrollment period, which is a period of time (usually 60 days) during which you can buy coverage outside the normal Open Enrollment Period. These qualifying life events include:

• Losing your current health insurance coverage due to reasons such as job loss, aging out of a parent's plan, or divorce.
• Changes in your family, such as getting married, having a baby, or losing coverage due to the death of your spouse, parent, or guardian.
• Changes in residence, such as moving to a different ZIP code or county.
• Becoming eligible for Medicaid or gaining membership in a federally recognized tribe.

Medicaid

Medicaid provides health coverage to low-income adults, pregnant women, the elderly, and people with disabilities. There is no open enrollment period for Medicaid, and you can apply for coverage at any time of the year. Eligibility guidelines and income limits vary from state to state.

Short-Term Health Insurance

Short-term health insurance plans can provide coverage for a limited period, typically from one month to one year. These plans are more flexible and may be less expensive than traditional health insurance. However, they often do not cover pre-existing conditions and may have limited benefits. Short-term health insurance is not considered "minimum essential coverage" under the ACA, and you may be subject to paying the individual mandate penalty.

Health-Sharing Plans

Health-sharing plans, often referred to as "healthcare sharing ministries," are faith-based alternatives to traditional health insurance. Members pay into the system, and upon receiving a bill, other members contribute to help pay. These plans are often available year-round and can provide an option for those who miss the open enrollment deadline. However, they may not cover medical care that is inconsistent with biblical teachings, such as prenatal care for out-of-wedlock pregnancies or addiction treatments.

Primary Care Membership ("Concierge Medicine")

Concierge medicine is a form of primary care offered directly to consumers, where patients pay a monthly or annual retainer for a contracted bundle of services. While it may not cover specialized care, it can provide routine, preventative care at a lower cost than traditional plans.

Temporary coverage

Temporary health insurance, also known as short-term health insurance, is a convenient option offered by private insurance companies to ensure you are not uninsured for a temporary, specific period. Short-term health insurance is typically available for limited durations of 365 days or fewer, with the option to renew or purchase another short-term policy for up to three years of coverage in total.

Short-term health insurance is a good option for those who:

• Missed the Affordable Care Act (ACA) open enrollment period
• Are waiting for coverage from a new employer to begin
• Need quick proof of insurance (for a special activity or trip)
• Are waiting until you can enrol in Medicare
• Are transitioning off your parents' health plan
• Are between jobs or health insurance coverage
• Are retiring prior to Medicare eligibility

Short-term health insurance is not suitable for those with pre-existing conditions, as these are not usually covered. It is also not suitable for those seeking comprehensive coverage, as it provides limited benefits with generally much higher costs.

To apply for short-term health insurance, you will need to:

• Research and compare plans
• Gather personal information, including your name, date of birth, contact information, Social Security number, and any dependent information
• Determine the coverage period you need
• Obtain a quote from insurance providers
• Complete the application
• Review and select coverage options
• Provide payment details
• Review and confirm your application
• Submit your application

Short-term health insurance is a temporary solution to bridge the gap between other health plans. It is not comprehensive coverage and is not regulated by the Affordable Care Act, mental health parity rules, the No Surprises Act, or other federal health insurance rules.

Higher costs

Short-term health insurance is a temporary solution for those who are between health plans, outside of enrollment periods, or need coverage in case of an emergency. It is important to note that short-term health insurance is not meant to be a long-term solution and has its limitations. While it typically offers lower premiums than standard health insurance, it often comes with higher out-of-pocket costs due to restricted benefits. Here are some key points regarding the higher costs associated with short-term health insurance:

Higher Deductibles and Out-of-Pocket Costs

Short-term health insurance plans often have significantly higher deductibles compared to traditional health plans. Deductibles on short-term plans can start at well under $100/month but can go much higher. You will need to pay out-of-pocket for medical services until you meet your deductible, and even after that, you may still have to pay coinsurance, which is a percentage of the costs you share with your plan. Additionally, there may be other out-of-pocket costs for services not covered by your plan, such as maternity care, mental health services, substance use services, vision care, or dental care. These additional costs can quickly add up, making short-term health insurance more expensive than anticipated.

No Coverage for Pre-existing Conditions

Short-term health insurance plans generally do not cover pre-existing conditions, and you may be denied coverage or face limited benefits if you have a pre-existing medical issue. This can result in unexpected out-of-pocket expenses if you require treatment for a pre-existing condition.

Limited Coverage and Exclusions

Short-term health insurance plans typically provide less coverage than traditional plans, which can lead to higher out-of-pocket costs when you need specific types of medical care. These plans often exclude coverage for prescription drugs, maternity care, mental health care, preventive care, and other essential health benefits. Even when certain services are covered, there may be limits or caps on the amount the plan will pay. For example, some plans have maximum coverage limits per term for prescription drugs, and these limits may not be sufficient for individuals with extensive medication needs.

Higher Premiums for Longer-Term Plans

While short-term health insurance plans initially offer lower premiums, the Biden administration has proposed rule changes to limit the duration of these plans. As a result, longer-term short-term plans will likely have higher premiums. This means that if you require coverage for a more extended period, you will pay more for your short-term insurance plan.

Lack of Government Subsidies

Short-term health insurance plans do not qualify for government credits or subsidies, such as tax credits on premiums or cost-sharing reduction subsidies. This means you will not receive any financial assistance to help lower your overall health insurance costs, as you might with an ACA plan.

Pre-existing conditions

Short-term health insurance is a temporary solution for those who are between health plans, outside enrollment periods, or need coverage in case of an emergency. It is important to note that short-term health insurance is not subject to the same regulations as traditional health plans and does not have to comply with Affordable Care Act (ACA) guidelines. This means that short-term health insurance often does not cover pre-existing conditions.

The length of time that short-term policies "look back" for pre-existing conditions varies by state, ranging from the previous six months to five years. If you purchase another short-term policy after the first policy expires, your new plan may not cover conditions that developed during your first policy term. In general, people who remain healthy can renew their short-term policies, while those with health issues, especially those needing medical treatment, are typically declined or charged extra.

Short-term health insurance is not intended to serve as permanent health insurance coverage. It is designed for individuals who are in transition and need temporary coverage. If you have a pre-existing condition, it is important to carefully review the terms and conditions of a short-term health plan before purchasing it, as your coverage may be limited or excluded.

State regulations

State-specific regulations

Short-term health insurance is not available in all states. In some states, temporary health plans aren't available for purchase at all. As of 2023, short-term health insurance was not available in the following states:

• California
• Colorado
• Connecticut
• Delaware
• Hawaii
• Illinois
• Maine
• Maryland
• Massachusetts
• New Jersey
• New Mexico
• New York
• Rhode Island
• Vermont
• Washington, D.C.

In other states, insurers may offer short-term health plans, but they are subject to state-specific regulations. For example, some states limit the duration of short-term plans, while others restrict the types of conditions that can be covered or the duration of coverage.

Duration of coverage

The duration of short-term health insurance coverage varies by state. In some states, short-term plans are limited to a maximum of three months, while others allow for longer periods, up to 364 days or even three years. It's important to note that the Biden administration has proposed rule changes to limit the total duration of short-term health plans to no more than four months.

Renewal options

The availability of renewal options for short-term health insurance also varies by state. Some states allow short-term plans to be renewed for an additional month, while others may have limitations on the total duration of coverage.

Benefits and exclusions

The benefits and exclusions of short-term health insurance plans can also differ by state. While some states may require short-term plans to cover certain essential health benefits, others may not. It's important to review the specific regulations in your state to understand what is and isn't covered by short-term health insurance.

Frequently asked questions