Given the astronomical cost of health care in the United States, going without health insurance isn’t a risk you want to take. If you aren’t covered, a trip to the doctor for a few stitches or an antibiotic for a sinus infection could end up costing you an arm and a leg. But, sometimes you may experience a lapse in coverage; you may have started a new job or recently purchased a policy through the Marketplace and it hasn’t gone into effect yet, or maybe you just came off of your parent’s policy; whatever the reason, being left uncovered – even if for just a short period of time – can lead to devastating consequences.
So, what can you do if you need health insurance now, but you don’t access to a standard policy? You can invest in a short-term health insurance plan.
What is a Short-Term Health Insurance Plan?
A short-term health insurance plan is a low-coverage, cost-effective health policy. Beginning in 2019, most people are eligible for short-term plans, and they are effective for up to 364 days. These policies can be extended as many as two times; so, in essence, it is possible to carry short-term health insurance for a three year period. Short-term plans are different from standard policies, as standard policies do not have any limits.
It’s important to note, however, that short-term plans are not available in all locations. In certain states, these policies are prohibited, including:
- New York
- New Jersey
In other states that allow short-term plans, there are regulations in place that restrict these policies; in the state of Maryland, for example, a short-term plan is only effective for a period of three months, and these plans cannot be renewed.
Reasons to Purchase a Short-Term Health Insurance Plan
These health insurance plans are specifically designed to fill in gaps in coverage. For example, if you had a traditional policy through your employer but you recently started a new job and your new employer-sponsored policy hasn’t gone into effective, short-term health insurance could provide you with the coverage you need before your new plan goes into effect.
Other reasons why you might consider purchasing a short-term plan include:
- You can’t afford a traditional policy. As per the Affordable Care Act, all standard insurance policies are required to offer coverage for 10 essential health benefits, such as maternity care and mental health services. While having access to this care is certainly beneficial for many, it drives the cost of insurance up, which can make a policy unaffordable. If you don’t require the 10 essential health benefits that an ACA policy would offer, but you do want to have coverage for the basics, a short-term plan may be a more affordable option for you. These plans provide the basic coverages at a more affordable rate.
- You missed the open enrollment period. If you are considering signing up for an insurance plan through the Health Insurance Marketplace, you will need to do so during the open enrollment period, which runs from November through December 31 of each year (dates do change). Unless you have a qualifying condition – you were married or you had a child, for example – you can only purchase coverage during the open enrollment period. Short-term health insurance provides you with coverage before you can purchase a standard policy during the open enrollment period.
- You’re too young for Medicare, but you are no longer working. If you had employer-sponsored health insurance and you retired, but you aren’t eligible for Medicare, a short-term plan could tide you over until you reach the age of 65.
Types of Short-Term Health Insurance Plans
There are several types of short-term health insurance plans available, and a variety of companies offer these plans. They vary in terms of cost, the services that are covered, and the period of time they remain in effect. To find out what type of policies are available to you, speak to a reputable agent that specializes in health insurance. Do keep in mind, however, that if you live in an area where short-term plans are prohibited, you will not be able to purchase this type of coverage.
Things to Keep in Mind
If short-term health insurance is the right option for you and you can purchase a policy in your location, keep the following things in mind while you are shopping:
- Make sure you consider the cost of coverage; you want to make sure that you aren’t going to end up paying an exorbitant amount for your coverage.
- Check the services that are offered; the last thing you want to do is invest in a policy that doesn’t provide coverage for the services you need.
- Find out if it’s an in-network plan, and if is, make sure that the medical care providers and facilities are ones that you can actually use.