What's a Short-Term Health Insurance Plan?

May 22, 2019

John was excited…and nervous. Up until now, the most he had to think about was figuring out what he was doing every weekend. But things just got real. John accepted his dream job in Florida. This meant moving a few states away from his parents, getting his own place and footing the whole bill for the first time in his life.

He knew he’d have to pay for rent, a car and car insurance, utilities and food. But last night when his parents sat him down to help him with a budget, he realized he hadn’t given health insurance a thought. He’d been on his parents’ health plan his whole life, and now he was turning 26, the age where he’d need to have his own coverage. 

The good news for John was that his new job offered health coverage. But there was a catch: he had to wait three months until he could get it, and John didn’t want to go without health coverage for that long. His sister was in the same boat when she graduated from college. His parents were still helping her get financially back on her feet after her surprise hospital stay. With no insurance, she was left with a large bill from the hospital when she needed her appendix removed. She hadn’t planned on that expense and so to save money, she moved back in with her parents.

He knew he needed something to fill the gap. Luckily, there was a solution!

John called an insurance agent in Florida and described his situation. The agent reviewed John’s options with him. He qualified for a Special Enrollment Period from the Federally Facilitated Marketplace. After looking at all the options and considering John’s current health conditions and budget, the agent recommended a Short-Term plan.

Short-Term plans provide coverage for short time periods until you can get enrolled into more permanent coverage. Since John was healthy and going to be on his employer’s plan in six months, this was a good solution for him. It gave him coverage for the time between leaving his parents’ plan and starting his new employer-provided plan, and it worked with his budget.

Life—and Insurance Needs—Change 

Like John, graduating from college, starting a new job or just moving out for the first time is an exciting time filled with new adventures…and responsibilities. Practical choices must be made, like what kind of health plan is best.

Even if someone is healthy and doesn’t take prescription medications regularly, it’s important to have health coverage. No one plans on getting sick or hurt, but if they do, the cost can take a big bite out of their budget. Having a health plan means they wouldn’t have to pay the full cost of their medical care.

How Do Short-Term Plans Work?

Short-Term plans are designed to cover emergency and unplanned care for a short time frame—to bridge the gap until someone can enroll in an ACA plan, get coverage through their job or qualify for Medicare.

Short-Term plans don’t cover all of the care and services that traditional Affordable Care Act (ACA) plans do. For example, they don’t have traditional prescription drug coverage and only cover health conditions that occur after the plan’s start date (pre-existing conditions aren’t covered).

Here are a few things to know about Short-Term plans:

• Short-Term plans are designed to provide health coverage for one to six months with the option to reapply for an additional period of time.

• They cover care for only new health conditions and emergencies that develop after the plan’s start date.  (The member would pay the full cost of care for any conditions that are considered pre-existing.)
• They include a program to get special discounted prices for prescription drugs.

Short-Term plans do not cover:

• Medical care for health conditions or injuries that a member has been treated for in the past 24 months before the plan’s start date (also called pre-existing conditions)
• Adult wellness checkups and preventive care (Preventive care is covered for children up to age 17. The only covered adult preventive care is an annual mammogram.)
• Maternity or newborn coverage (A rider can be purchased to add this coverage.)
• Habilitative services, like physical, occupational or speech therapy
• Traditional pharmacy coverage with copays and coinsurance

We hope this helped you understand what’s covered by Short-Term plans. If you have questions about this blog, we’re here for you.