Who can benefit from short term health insurance?

If you’ve got a gap between major medical insurance coverage for whatever reason, this temporary fix could be the solution.

Short term medical insurance, also called temporary health insurance, is a type of plan that provides coverage for a limited amount of time. The length of time varies depending on the plan and the state you live in.

These plans can help in specific situations — especially when your life is changing in ways big and small. First, learn the basics of short term health insurance. Then see how this type of plan may fit your needs, depending on your circumstances, as well as other options you may have.

Short term health insurance: the basics

Short term health insurance plans don’t follow the same rules as Affordable Care Act (ACA) plans, which are individual and family plans that are available on the federal Health Insurance Marketplace or state exchanges.

Short term plans don’t offer the same coverage as private or ACA health insurance or the mandated coverage necessary to avoid a penalty in some states. What a short term health insurance plan covers will depend on the type you choose, but most plans offer coverage for:

Doctor office visits
Urgent care visits
Emergency room visits
Inpatient and outpatient hospital services
Prescription drugs

Pricing for these plans depends on factors such as your age, gender and whether you smoke. That will determine what you pay as your monthly premium.

These plans also have a deductible that you pay before the plan starts to pay for covered services. Some medical services may require a copay or coinsurance. Some short term plans also limit the number of visits or a maximum dollar amount covered.

Many short-term medical insurance plans cover certain limited types of preventive care. These include mammograms, pap smears and prostate screenings.

What short term plans typically don’t cover is treatment or medications for pre-existing conditions. Pre-existing conditions are subject to medical underwriting. It’s always a good idea to see what’s covered before you sign up for any health insurance plan.

Short term health insurance can be useful in certain situations, whether they’re planned or unexpected. Here is a rundown of some of the more common scenarios where a short term plan may be useful.

Sometimes you need a quick solution for your healthcare needs. See how short term health insurance may fill a gap between major medical policies for a limited period of time.

1. You’re in between jobs

If your new job hasn’t started yet, you may find out that you don’t have health insurance. That’s usually because your new employer’s plan has a waiting period. That can be between 30, 60, and even 90 days before the benefits kick in.

You probably don’t want to be uninsured for that long in case you need to go to the doctor or ER.

That’s where a short term insurance plan can help. You can apply any time of year, and healthcare coverage can start as soon as the next day.

Another option is COBRA. COBRA is a federal law that lets you stay on your old employer’s plan for up to 18 months.¹

With COBRA, you can keep seeing your doctors and getting care without interruption. This makes sense if you or a family member have a chronic condition like asthma or diabetes and need to see a doctor regularly.

COBRA plans can get expensive, though. You may have to pay the full price of the monthly premium, even the portion your employer used to pay, and a 2% administrative fee.¹

A short term plan might fit your budget better if you’re just waiting a month or two for your private health insurance plan to begin.

2. You’re going through a divorce

Typically, when you get a divorce, you lose your health insurance if you were on your spouse’s plan.

This life change qualifies for a Special Enrollment Period (SEP).² An SEP lets you sign up for a new plan without waiting for the annual ACA Open Enrollment Period at the end of the year. But to get an SEP you must be going through certain situations. These qualifying life events include:²

Getting married or divorced
Moving to another state
Losing your job and your health coverage with it
Becoming a US citizen

This means, you can sign up for your employer’s health plan or shop for one through the ACA Health Insurance Marketplace.

But if you’re having trouble choosing a plan because you’re already overwhelmed with many other decisions, enrolling in a short term plan could be a solution. That way, you can take your time shopping for a traditional health plan instead of rushing the decision.

Another consideration? ACA coverage and even your employer’s health plan might take time to start. A short term plan can fill the gap between major medical policies for a limited period of time, so you don’t have to go without health insurance during a super-stressful time.

3. You’re starting your own business

If your dream is to start your own business or join the gig economy, you need to think about your health insurance needs too.

If you don’t have chronic conditions, you might opt for a short term plan to bridge the coverage gap until you can sign up for longer term insurance. Temporary health insurance can give you quick coverage while you get your business up and running.

Once you have a steadier income and know your monthly budget, you can shop for a longer term option.

In the meantime, you can even pair a short term plan with other supplemental plans, like vision and dental, if you want more coverage.

For extra benefits, consider combining your short term plan with fixed benefit health insurance to pay for out-of-pocket costs. Learn how this plan can help you.

4. You’re turning 26 and aging out of your parents’ plan

There are a lot of reasons to stay on your parents’ health plan even if you leave home. Maybe you’re a full-time student. Or your job doesn’t come with health benefits.

But you can’t stay on your parents’ plan forever. Once you turn 26, you must sign up for your own health insurance. Luckily, this milestone qualifies as an SEP. So you can buy a new plan through the ACA Health Insurance Marketplace.³

But there might be a brief wait before your ACA plan begins depending on what day of the month you sign up.³ Or if you have a job that offers health insurance, there may be up to a 90-day wait before that kicks in.

A short term health insurance plan can help cover that time you’re in between major medical benefits.

5. You retired early but aren’t eligible for Medicare yet

Medicare starts when people are 65 years old. If you enroll in Medicare during the beginning of your Initial Enrollment Period, which starts 3 months before your 65th birthday, your coverage kicks in on the first day of the month you turn 65.⁴ But if you retire earlier than that, you need to find another health insurance option.

Again, a short term plan may be a good choice. If you only need coverage for a few months before Medicare starts, it can help fill the gap in healthcare coverage. Or short term insurance can serve as a bridge until you decide on a longer term plan that fits your budget, whether it’s an ACA marketplace plan or health insurance from your former employer.

Short term health insurance doesn’t fit every scenario, but it can help during life transitions when you need fast, flexible coverage. Whether you’re between jobs, aging out of a parent’s plan or waiting for your ACA coverage to start, a short term plan can be valuable for when there is a gap between major medical insurance policies.

Explore short term health and other supplemental plans online or call 844-211-7730 to speak with a licensed insurance agent.

For informational purposes only. This information is compiled by UnitedHealthcare, and/or one of its affiliates, and does not diagnose problems or recommend specific treatment. Services and medical technologies referenced herein may not be covered under your plan. Please consult directly with your primary care physician if you need medical advice.

Sources: