Short term health insurance appeals to a variety of people. Some might suffer from a lapse in permanent coverage because they’ve changed jobs, are looking for work, or have to wait for the annual Open Enrollment Period. Certainly, typically modest premiums for short term coverage and an easy enrollment process also attract many applications for short term coverage. Still, it’s important to weigh both the pros and cons of this kind of health coverage before making a decision.
In most states, Americans can buy short-term health insurance for a term of several months to a year. You also have the chance to renew your policy up to three times (meaning, for now, people can have short term health insurance for up to three years). In the past few years, health insurance companies designed their short-term health insurance plans to help people who needed to quickly obtain an affordable medical plan that could bridge the gap between permanent policies.
Going forward, health insurance companies that sell short term health insurance will try to attract more people who need cheaper premiums and intend to keep their coverage longer than a few months. Because of new government rules, allowable terms for short-term health insurance have expanded from nine to twelve months in 2019.
While the federal government has relaxed the rules for short-term health insurance, each state can make its own insurance regulations. In fact, insurance is largely regulated by the state and not the federal government.
The following states still completely prohibit short-term health insurance, according to this report:
Vermont has moved in another direction. Instead of prohibiting short-term health insurance, the state has tried to force these temporary policies to offer all of the Essential Health Benefits that Obamacare policies must provide. Also, even though the federal government now allows for a 12-month term, Oregon, Illinois, and Maryland have passed state laws that only allow for more limited periods.
Yes, short-term health insurance can provide many people with a great value and a good solution when they need affordable coverage quickly. It’s just that these non-ACA plans aren’t regulated the same way that ACA policies are, so people must understand some risks they may take by opting for the temporary protection of short-term health insurance. The majority of states recognize that short-term health insurance performs a vital role, so they rely upon licensed agents to explain the pros and cons of various health insurance choices to their clients.
These are some potential drawbacks of short-term health insurance:
ACA policies cannot decline applicants because of pre-existing conditions. Even with the federal government’s relaxed rules for short term coverage, most people should still consider these temporary policies as a temporary solution. It’s just that people in most states can rely upon them for longer periods of time than they could in the past.
In most cases, short term health insurance typically costs much less than ACA major medical health insurance. According to eHealth’s own data:
Short term coverage could offer a good solution for people who want an affordable way to protect themselves against unexpected or emergency medical bills. In addition, short term health insurance can provide the proof of coverage that people need to participate in various activities or vocations.
Easy applications, modest premiums, and no waiting for enrollment periods can all make short term health insurance seem like an attractive choice for people who lack affordable access to permanent medical insurance. Good examples of people who can benefit from short term health insurance might include:
Note that even if you missed this year’s Obamacare Open Enrollment, you may still have the option to enroll in a plan if you qualify for a Special Enrollment Period. Some examples of events that will trigger a Special Enrollment Period include loss of job-related group health, divorce, marriage, income changes, and moving away from a network plan’s service area. If you don’t qualify, you still have the option of enrolling in short-term health insurance at any time of year.
At eHealth, we don’t just make it easy to compare short term health insurance, we also allow you to compare short term health insurance with other health insurance options. Additional choices can include both Obamacare and non-Obamacare medical plans. Besides individual and family medical plans, we can also help you shop for dental and group health insurance. Explore your health insurance options now.