Short Term Health Insurance or Short Term Medical (STM for short) is an affordable health insurance that is meant to bridge the gap in between traditional health coverage. Those who missed open enrollment and without a qualifying event in order to purchase a traditional plan outside of open enrollment would be candidates for STM.
Short term plans provide coverage for up to 12 months. Beginning in 2019, some states will allow up to 36 months allowing you to purchase a second and third year short-term plan back to back.
It’s important to know that short term plans are not considered minimum essential coverage so STM insurance is still subject to the ACA’s penalty (which is being eliminated in 2019) for minimum health coverage.
As with traditional health plans emergency events are nearly always covered but in general short-term plans don’t cover pre-existing conditions, and sometimes do not cover maternity, mental health or preventive care.
Bottom line: Temporary health insurance is a low-cost option to protect yourself temporarily from unforeseen and emergency medical expenses. But it’s not a substitute for ACA-compliant coverage, and it doesn’t include the myriad consumer protections provided under the law.