Short-term health insurance offers a convenient and affordable way for some people to get medical care, but it’s not always the best option for everyone. If you’re between jobs or need proof of insurance, then short-term health plans may be right for you. On the other hand, short-term insurance won’t be an option for people with extensive medical concerns or those with pre-existing conditions. How can you tell if short-term plans will fit your needs? Read on for more information on short-term health insurance.
Pros and Cons of STHPs
Short-term health insurance may also be called short-term health plans or STHPs, and private insurers sell these plans to people who don’t need a lot of medical coverage. There are several good reasons to buy short-term health plans. For example, you may retire from work and choose to forego COBRA coverage while you wait to enroll in Medicare. According to U.S. News & World Report’s Health blog, young adults who no longer qualify for their parents’ plans under the Affordable Care Act can also take advantage of STHPs until they find a job that offers benefits.
What makes short-term health insurance so appealing? For starters, these plans are much cheaper than individual plans on the health insurance exchange sites or long-term private plans sold by the same insurers. They also offer greater flexibility in coverage terms as now enrollees can choose plans that last between 30 days and 12 months. However new for 2019 and now 2020, are plans that will lock in rates and coverage benefits for up to 36 months.
Above all, short-term health insurance plans offer beneficiaries peace of mind that they have coverage in place during unexpected crises.
On the downside, short-term health insurance plans aren’t appropriate for people with pre-existing conditions or those who need financial assistance to pay for health insurance. While STHPs are affordable, some people may struggle to pay a monthly premium for coverage. You can only get federal subsidies for health insurance by purchasing a plan through the Obamacare marketplaces.
People with pre-existing medical conditions can’t get short-term health insurance, and you might be surprised to learn that the label “pre-existing” can apply to pregnancy as well. Also, these types of plans are not renewable like traditional insurance, and insurers do not have to approve applicants even if enrollees already had a plan beforehand.
Short-term Insurance and the Law
The Affordable Care Act requires all eligible Americans to buy some type of health insurance plan that qualifies as minimum essential coverage. Unfortunately, short-term health insurance doesn’t count. One of the ways that people can still get coverage while they wait until open enrollment begins in November 2014 is to get a STHP that covers basic needs. If you choose this option, remember that STHPs do not meet the requirement of the law, and you may be required to pay a penalty fee when you do your taxes.
Bridging the Gap
With all the negatives, it might seem obvious to choose regular insurance over STHPs. However, short-term health insurance has its benefits. Health insurance professionals insist that short-term plans provide a safety net for people who are between jobs or those waiting until their group health plans kick in. If you’re relatively healthy, then a short-term health insurance plan can be a great way to fill the gap until you find long-term insurance.