Alyssa Lane
Short-term health insurance is meant to cover medical bills for a short time, often during a gap in other insurance coverage. However, it has its drawbacks. Short-term health plans are not a part of the Affordable Care Act (ACA) and do not need to comply with those standards. This means pre-existing conditions are typically not covered, and insurers can deny coverage or charge more for specific treatments. Short-term plans also have a lifetime maximum the insurer will pay, often between $250,000 and $2 million. The coverage is limited, and deductibles can be significantly higher than in traditional plans. Additionally, short-term plans may not be easy to find, as some states ban them, and insurers may not want to deal with them.
| Characteristics | Values |
|---|---|
| Coverage | Limited |
| Pre-existing conditions | Not covered |
| Cost | Affordable premiums |
| Coverage period | Temporary |
| Coverage limits | Maximum insurer payout |
| Consumer protection | Not guaranteed |
| Renewability | Not renewable |
| Availability | Not widely available |
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What You'll Learn
- Insurers can deny coverage for pre-existing conditions and exclude treatment for them
- Insurers can deny a contract if the enrollee becomes sick or injured during the coverage term
- Short-term plans have a lifetime maximum the insurer will pay, often between $250,000 and $2 million
- Short-term plans may have waiting periods for covered treatment, even for serious conditions
- Short-term plans are not renewable, unlike other individual health insurance policies
Insurers can deny coverage for pre-existing conditions and exclude treatment for them
Short-term health insurance is meant to cover medical bills for a short time, often during a gap in other insurance coverage. However, insurers can deny coverage for pre-existing conditions and exclude treatment for them. This means that short-term health plans are not a part of the Affordable Care Act (ACA) and do not need to comply with those standards. As a result, pre-existing conditions are not covered in a short-term or temporary health plan, and individuals can be denied coverage for a medical issue they have previously been treated for.
Insurers selling short-term coverage can deny enrollment to people with pre-existing conditions and exclude from coverage services needed to treat those conditions. Insurers can even deny a new or renewed contract if the enrollee becomes sick or injured during the coverage term. Health history questionnaires are used by short-term insurers to identify and deny coverage to people with certain pre-existing conditions, such as pregnancy or an applicant who received medical "consultation, advice, or treatment" for conditions such as diabetes or a heart disorder.
Even if they are offered coverage, people with pre-existing health conditions may never have claims paid under short-term coverage. Insurers may comb through members' medical histories to determine if a service was for a pre-existing condition in order to deny a claim. This means that short-term health insurance may not be ideal for the long term. However, there are some situations in which individuals may need temporary coverage, and a short-term health plan may provide it.
Short-term health insurance plans give individuals temporary, limited coverage during a lapse in permanent coverage, protecting them from expensive medical bills that arise from unexpected health changes or emergencies. Short-term health insurance is often worth it for those who want a health plan in case of emergency or need immediate coverage. It is important to note that short-term health insurance coverage varies greatly depending on the plan and the insurance company.
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Insurers can deny a contract if the enrollee becomes sick or injured during the coverage term
Short-term health insurance is meant to cover your medical bills for a short time, often during a gap in other insurance coverage. However, insurers selling short-term coverage can deny a new or renewed contract if the enrollee becomes sick or injured during the coverage term.
Short-term health insurance typically provides some level of coverage for preventive care, doctor visits, urgent care, and emergency care. There may also be coverage for prescriptions. However, short-term health plans are not a part of the Affordable Care Act (ACA), so they do not need to comply with those standards. That means pre-existing conditions are not covered in a short-term or temporary health plan, and you can be denied coverage for a medical issue you've previously been treated for. Insurers selling short-term coverage can deny enrollment to people with preexisting conditions and exclude from coverage services needed to treat those conditions.
The insurer can even deny a new or renewed contract if the enrollee becomes sick or injured during the coverage term. Questionnaires about health history are used by short-term insurers to identify and deny coverage to people with certain preexisting conditions, such as pregnancy or an applicant who received medical “consultation, advice, or treatment” for conditions such as diabetes or a heart disorder. Even if they are offered coverage, people with preexisting health conditions may never have claims paid under short-term coverage. Insurers may comb through members’ medical histories to determine if a service was for a preexisting condition in order to deny a claim.
Short-term health insurance policies offer lower monthly premiums compared to ACA-compliant plans because they offer less insurance protection. Medically underwritten policies can only be purchased by people when they are healthy. Individuals who buy short-term policies and then develop health conditions will lose coverage when the contract ends. Short-term policies typically do not cover essential benefits, such as prescription drugs, and often apply dollar caps and higher deductibles on coverage that are no longer allowed under ACA-compliant individual market and group health plans.
As a result, people who buy short-term policies today in order to reduce their monthly premiums take a risk that, if they do need medical care, they could be left with uncovered bills and/or find themselves “uninsurable” under such plans in the future (though they would be able to buy ACA-compliant policies at the next open enrollment period).
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Short-term plans have a lifetime maximum the insurer will pay, often between $250,000 and $2 million
Short-term health insurance is meant to cover medical bills for a short period, often during a gap in insurance coverage. Short-term health plans are not a part of the Affordable Care Act (ACA) and so they do not need to comply with those standards. This means that pre-existing conditions are generally not covered in a short-term plan, and insurers can deny coverage or charge more based on your health history.
Short-term health plans have a lifetime maximum that the insurer will pay out, often between $250,000 and $2 million. This is the total your plan will pay for covered costs. So, if you have a $1 million plan maximum, once your medical bills total $1 million, the plan won't pay anything else toward your care.
In addition to this maximum, short-term plans may impose other coverage limits. For example, some plans limit how often you can visit the doctor or impose a dollar maximum, such as $500 per policy period. Similarly, there may be caps on treatment reimbursements for emergency room coverage, which could be as low as $250. There may also be limits on the number of surgical procedures covered or the dollar amount covered.
Due to these limits, you could be billed by the facility or provider for the remaining amount, which could quickly spiral into medical debt. This is a significant risk to consider when thinking about short-term health insurance.
Short-term health insurance is also not renewable. Federal law requires all other individual health insurance to be guaranteed renewable at the policyholder's option, but short-term policies are an exception. Coverage terminates at the end of the contract term, and to continue coverage, an individual must apply for a new policy. This means that if a person buys a short-term policy and then becomes seriously ill, they will not be able to renew coverage when the policy ends.
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Short-term plans may have waiting periods for covered treatment, even for serious conditions
Short-term health insurance is meant to cover your medical bills for a short time, often during a gap in other insurance coverage. It is a type of health plan that can provide temporary medical coverage when you are between health plans, outside enrollment periods, or need some coverage in case of an emergency.
However, short-term health insurance only provides limited coverage compared to traditional health insurance. One of the biggest drawbacks of short-term health insurance is that it may have waiting periods for covered treatment, even for serious conditions. This means that even if you have a short-term health plan, you may have to wait before receiving treatment for a covered condition. For example, some plans may impose maximum coverage limits for treatment, such as a dollar maximum of $500 per policy period for doctor visits or a range of $500 to $10,000 for daily hospital stays.
A 2020 staff report from the U.S. House of Representatives found that many short-term plans have these waiting periods, even for serious conditions such as cancer or a medical emergency. This can be a significant disadvantage for individuals who need immediate treatment and may result in delays in receiving necessary medical care.
In addition to waiting periods, short-term health plans may also deny coverage for specific conditions for a period of time, such as the first six months, or for the entire contract. This is especially true for pre-existing conditions, as short-term health plans are not a part of the Affordable Care Act (ACA) and do not need to comply with its standards. As a result, insurers can charge more or even deny applicants with pre-existing medical conditions.
Due to these limitations, it is important to carefully consider the terms and conditions of short-term health plans before enrolling. While they may offer affordable premiums and temporary coverage, the waiting periods and limited benefits can impact an individual's access to timely and necessary medical treatment.
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Short-term plans are not renewable, unlike other individual health insurance policies
Short-term health insurance policies are not renewable, unlike other individual health insurance policies. This means that if an individual with a short-term policy becomes seriously ill, they will not be able to renew their coverage when the policy ends. Instead, they will have to apply for a new policy, which may be difficult or impossible if they have a pre-existing condition.
Short-term health insurance policies are not covered by the Affordable Care Act (ACA) and are not subject to the same regulations as other individual health insurance policies. This means that insurers can deny coverage to people with pre-existing conditions and are not required to provide the same essential benefits as ACA-compliant plans. Short-term policies typically do not cover prescription drugs and often have higher deductibles and other out-of-pocket costs.
The non-renewability of short-term policies can be a significant disadvantage for individuals who need ongoing medical care. If a person with a short-term policy develops a health condition, they will lose coverage when the contract ends and may be unable to find a new insurer who will cover their pre-existing condition. This could leave them with high medical bills and/or unable to obtain insurance in the future.
The inability to renew a short-term policy can also be problematic for individuals who experience a sudden change in their health status. For example, if a person with a short-term policy is diagnosed with a serious illness or suffers a major injury, they may find that their policy does not provide adequate coverage and that they are unable to renew it or find a new policy that meets their needs.
The lack of renewability also means that individuals with short-term policies may have to go through the process of applying for new insurance coverage on a regular basis, which can be time-consuming and cumbersome. This is in contrast to other individual health insurance policies, which can be renewed automatically or with minimal effort on the part of the policyholder.
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Frequently asked questions
Short-term medical insurance is meant to cover your medical bills for a short time, often during a gap in insurance coverage. However, it only provides limited coverage compared to traditional health insurance. Insurers can charge more or even deny applicants with pre-existing medical conditions. Short-term medical insurance is not a part of the Affordable Care Act (ACA) and so does not need to comply with those standards.
Short-term medical insurance does not cover pre-existing conditions and insurers can deny coverage for specific conditions for a period of time, such as the first six months, or for the entire contract. Most temporary health insurance plans do not cover maternity care and mental health, among other things.
Short-term health plans are sold through private insurance companies. Not all companies offer this type of plan. These plans are not available through the Health Insurance Marketplace and do not conform to ACA guidelines. To buy a short-term medical plan, you can search for a private insurance company that offers them.
