What is short term health insurance and what does it cover?

Short Term Health Insurance plans are major medical insurance that provides individual healthcare coverage for a defined period of time, up to 364 days and renewable for up to 36 months in many states.

Short Term Health Insurance plans are more affordable than other forms of major medical health insurance and, depending on your state, can provide coverage for up to 12 months with renewals for up to 36 months.

There are two other big advantages of Short Term Health Insurance over other forms of major medical insurance:

• First, you can use your Short Term Health Insurance plan to pay for services from ANY doctor or hospital. Yes, you don’t have to change doctors!
  
  
• Second, Short Term Health Insurance plans have no open enrollment period restrictions, so you can apply at anytime.

You usually will be notified within minutes if your application is approved, and you can use your coverage as early as the next day!

At iHealth Agents, we specialize in affordable Short Term Health Insurance plans, and we are committed to offering consumers flexible choices.

Why Choose A Short Term Health Insurance Plan?

1. Because a Short Term Health Insurance plan is much more affordable than an ACA plan and starting in 2019, there is no tax penalty.

In particular, if you don’t qualify for Obamacare plan subsidies, then you may face especially high premiums. If your household income is less than indicated below, you would qualify for a subsidy:

Family Size	1	2	3	4	5	6
Income	$47,520	$64,080	$80,640	$97,200	$113,760	$130,320

2. You can always get an ACA plan during the next Open Enrollment Period if you do develop a condition that prevents you from reapplying for a Short Term Health Insurance plan.

Affordable Care Act health plans cannot deny coverage for pre-existing conditions.

If you do develop a health condition, you might lose eligibility for a subsequent Short Term Health Insurance plan, but you can simply switch to an ACA plan during Open Enrollment.

3. Short Term Health Insurance is adaptable.

The ACA has strict requirements regarding the benefits it requires, called 10 essential health benefits. Every plan, for example, must offer maternity services.

So if you’re a single male who buys an ACA plan, you will be paying for maternity coverage that you’ll never need.

Conversely, Short Term Health Insurance offers streamlined benefits to cover exactly what you think you’ll need: hospital, doctor, x-ray, and other treatment benefits in case of illness or an accident.

5. Short Term Health is available 24/7, 365 days a year.

You can apply and purchase a Short Term Health Insurance year round, whereas with Obamacare, you have to enroll by the Open Enrollment Period deadline, unless you meet certain requirements for a Special Enrollment Period.

FYI: The ACA Open Enrollment Period is the six weeks between November 1st and December 15th.

 

Who Should Consider Short Term Health Insurance?

Short Term Health Insurance most certainly isn’t for everyone and it’s not intended to be.

It’s intended to be an affordable option for people who are in overall good health, and don’t have certain chronic conditions, or complex medical needs.

ACA plans offer benefits for chronic and complex conditions, including mental health needs, and would be more appropriate for folks with larger concerns or requirements Additionally, people who have had a significant health event or medical condition in the past five years may have a hard time finding a Short Term Health Insurance plan that will accept them or provide coverage for their pre-existing condition.

Short Term Health Insurance might be useful if you:

• Missed the annual Open Enrollment periods for Obamacare/ACA plans.
• Have a waiting period before you can enroll in another major medical insurance plan.
• Are in between jobs, a part-time or temporary worker, or looking for a less expensive alternative to COBRA.
• Are a student, a recent graduate, or have aged out of your parent’s health plan.
• Have retired but are too young for Medicare.
• Have a preferred doctor or hospital that doesn't accept Obamacare or an Obamacare plan isn't available in your area.
• Are like millions of Americans and simply can’t afford Obamacare.

How Is Short Term Health Insurance Different From Obamacare?

Affordable Care Act plans typically have broader benefits than those found in Short Term Health Insurance plans, but, without the premium subsidies available to some qualified purchasers, cost much more than Short Term Health Insurance plans.

All ACA individual health plans must have the "10 essential health benefits." Short Term Health Insurance plans, in comparison, do not have a standardized set of benefits.

Short term plans usually offer what would be described as streamlined "major medical coverage" that covers healthcare costs in the event of accidents and illnesses.

Many plans also cover doctor visits for routine illnesses and injuries.

The chart below details some of the major benefit differences between Short Term Health Insurance and Affordable Care Act plans. It is important to note that Affordable Care Act plans do not deny care for pre-existing conditions nor do they reject applicants based on health problems.

	Short Term Health Insurance Plans	Affordable Care Act Plans
Coverage availability	Apply any time and get coverage as early as the next day.	Apply only during Open Enrollment (or Special Enrollment due to a qualifying event) and get coverage on a standardized effective date 2-6 weeks in the future.
Coverage duration	1 month to 12 months depending on the state. Many states allow you to reapply for back-to-back coverage.	As long as the plan is available. You can change plans during Open Enrollment (or Special Enrollment with a qualifying event).
Prescription drug coverage	Many Short Term Health Insurance plans provide a drug discount card but do not provide drug coverage. Some newer plans have a prescription drug coverage option for generic drugs not associated with a pre-existing condition. Brand name drugs and specialty drugs are typically uncovered.	Minimum of one drug per class must be covered but the minimum number of drugs per class is often more due to the benchmark formulary chosen for each particular state.
Maternity and newborn care	Complications of maternity are covered but not standard childbirth services.	Full coverage. Applicants cannot be denied based on pregnancy as a precondition.
Mental health services	Some plans offer a limited benefit. In some states coverage is included because the state mandated it.	Coverage included, but states vary on their definition of “mental health” services, so while some do include learning disabilities or conditions like Autism, other states do not.
Substance use disorder services	Coverage is included only when mandated at state level.	All ACA plans have full coverage.
Rehabilitative and habilitative services and devices	Coverage is included only when mandated at state level.	All ACA plans have full coverage.
Preventive care	Some plans have selected preventive care benefits with cost-sharing. However, many plans do not cover preventive care services.	Preventative services must be provided without cost-sharing.
Pediatric services - oral and dental care	Coverage is included only when mandated at state level.	All ACA plans have full coverage in accordance with state interpretations.
Healthcare provider networks	Short Term Health Insurance plans typically have broad acceptance among healthcare providers. Some have a preferred network with negotiated pricing for healthcare services and a larger non-preferred network where the plans pay 'usual and customary' fees for covered healthcare.	These plans have been noted for a significant use of "narrow networks" to increase the ratio of enrollees to healthcare providers.
Uninsured tax penalties	The maximum penalty is the national average premium for a bronze plan. The tax is 2.5% of modified adjusted gross household income or $695 per person, whichever is greater. This went away in 2020.	ACA plans meet the requirements for avoiding the tax penalty. This went away in 2020.
Coverage of pre-existing conditions	These plans evaluate health status and pre-existing conditions when processing an insurance application and determine whether the applicant is approved or rejected for coverage.	These plans do not consider health status or pre-existing conditions when processing an insurance application.

What's Important to Know About Short Term Health Insurance Today?

Short Term Health Insurance is a great choice for many consumers, but there are certain elements that you should take into consideration when looking at Short Term Health Insurance as a health insurance option.

1. Having Short Term Health Insurance will not incur the Obamacare tax penalty.

Beginning in 2020, new regulations eliminated the tax penalty for not having ACA insurance. Before 2020, because Short Term Health Insurance plans do not meet the requirements set by the Affordable Care Act, you may still be responsible for paying the tax penalty called the “Shared Responsibility Tax.”

Since 2016, the tax was either 2.5% of modified adjusted gross household income or $695 per person, whichever is greater. 

2. Short Term Health Insurance plans are not renewable, but instead require you to reapply if you wish to add another period of coverage.

Short Term Health Insurance plans cannot be automatically renewed, and you will need to submit a new application.

3. You can be denied coverage due to pre-existing conditions.

Like medical insurance before the ACA, Short Term Health Insurance plans can deny your application based on your current and past health conditions. Insurers will often review up to five years of your health history.

4. Short Term plans are not required to have the same coverage benefits as Affordable Care Act (Obamacare) plans.

The Affordable Care Act established a very clear set of minimum coverage benefits called the “10 essential health benefits.” Short Term Health Insurance is a streamlined type of major medical insurance and does not cover all of the ACA’s “essential health benefits” such as maternity or mental health.

As a result, the premiums for Short Term Health Insurance are often significantly less expensive but still provides medical coverage for illnesses and injuries and include services such as emergency room, hospitalization, doctors, specialists, labs, and other important benefits.

5. You can cancel your policy anytime you want.

Most short term plans allow you to make month to month payments up to the maximum term set by your state.

At the end of your policy, your coverage will automatically terminate. If you need to cancel your coverage earlier, you should contact your licensed AgileHealthInsurance sales agent and inform them.

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