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Apples to Oranges: How Short Term Health Insurance Stacks Up Against ACA Plans1

You’re a comparison shopper. You look for the best deal. You drive to a different store, surf to a different website just to make sure you get everything you need out of what you have to spend. So if you do that for a car or for a dishwasher, of course, you’re doing it when it comes to health care coverage for you and your family.

So just when you think you have your choice of Affordable Care Act (ACA), or Obamacare, medical insurance plans narrowed down to a few options and are considering what’s best for you and your family, you hear something about Short Term health insurance, also called Temporary health insurance or Term health insurance. That makes you wonder - Can I get the same benefits for less money if I choose Short Term?

Compare Short Term Medical Insurance to ACA Coverage

Short answer: No.

Comparing ACA health insurance to Short Term health insurance is like comparing a pickup truck to a compact car. Both are transportation, but the reasons people purchase them and the people who need them are apt to be very different.

Here’s why...

How Have Health Plan Benefits Changed Under the Affordable Care Act?

Under the ACA, medical insurance plans must provide what the ACA calls minimum essential coverage. With a few exceptions, medical insurance plans that meet the minimum essential coverage standard are those that include at least 10 essential health benefits.

  1. Doctor visits for illness and injury and other outpatient care (known as ambulatory services)
  2. Emergency services
  3. Hospitalization
  4. Maternity and newborn care
  5. Mental health and substance use disorder services
  6. Prescription drug coverage
  1. Rehabilitative and habilitative services and devices (for example, relearning to walk after a stroke and improving ability to speak without an impediment)
  2. Laboratory tests and services
  3. Preventive and wellness care
  4. Pediatric services (including both oral care and vision care)

The idea is that these health benefits create a base standard for coverage. Each state further defines the coverage under these categories. So, you still need to review plans in your area carefully to be sure you are getting the benefits in each of these categories that fit your personal needs. However, if you purchase an ACA-compliant health plan, you know your plan will have some coverage in at least these 10 essential health benefit categories.

Affordable Care Act Mandated Coverage

How Does Short Term Health Insurance Compare to the ACA Essential Health Benefits?

Short Term insurance, also known as Temporary insurance or Term health insurance, is not ACA-compliant health insurance. It does not fulfill the requirement of being minimum essential coverage as defined by the ACA. This means it is not required to include those 10 essential health benefits that an ACA health plan would have to have.

So, an important part of deciding if Short Term health insurance is the right choice for you means understanding how a Short Term plan might measure up against these essential health benefits. What might you not be getting by purchasing it?

The nearby table can help you make the comparison between ACA plan benefits and Short Term medical insurance benefits.

Different Plans, Different Needs

You can see the clear differences. ACA health plans are designed to be the total package, what insurance companies call major medical or comprehensive coverage. ACA health plans include coverage for almost every aspect of your health care—not just visits to the doctor when you are sick or to the hospital when you have something wrong, but preventive and wellness care, coverage for your ongoing prescriptions, rehabilitation, etc.

Short Term health insurance is still considered major medical or comprehensive coverage, but it is not considered minimum essential coverage under the ACA. It helps cover you for emergencies and the unexpected illnesses over a short period of time. It is not designed to be an all-around, long term solution to your health care needs. It can really vary in what it does and doesn't cover. So check over any plan carefully before you buy to make sure it covers what you need.

Essential Health Benefits ACA Plans Short Term Plans
  1. Doctor visits for illness and injury and other outpatient care (ambulatory services)
Yes. Subject to your deductible or a copay depending on your plan.
  1. Emergency services
  1. Hospitalization
  1. Maternity and newborn care
Pregnancy not covered, except for complications. Newborn care limited.
  1. Mental health and substance use disorder services
No coverage or limited coverage, depending on your plan.
  1. Prescription drug coverage
No coverage or limited coverage, depending on your plan.
  1. Rehabilitative and habilitative services and devices (relearning to walk after a stroke and improving ability to speak without an impediment)
Limited. Check your plan.
  1. Laboratory tests and services
  1. Preventive and wellness care
No coverage or limited coverage, depending on your plan.
  1. Pediatric services (including both oral care and vision care)
No, unless mandated at the state level.

Short Term vs. ACA: The Other Big Differences

Benefits aren’t the only area where you find big differences between Short Term plans and those that fulfill ACA requirements. As you consider your options, remember that these are perhaps the biggest differences between the two:

ACA Plans

You are guaranteed acceptance into an ACA health insurance plan.

As long as you continue to pay the premium, you keep your plan. Also, you can change it during Open Enrollment period each year, or during a Special Enrollment if you have a qualifying event.

Your preexisting conditions will be covered.

You may be eligible for tax subsidies to help with your insurance costs.

Short Term Plans

You have to apply, answer medical questions and be approved for coverage by your insurance company to purchase a Short Term plan.

When your term is up, you can't renew that Short Term health plan. You will need to seek other insurance options.

Preexisting conditions are not covered.

You may be subject to a tax penalty for not having minimum essential coverage.


So, by all means, do your comparison shopping, but do so understanding that Short Term health insurance and an ACA health insurance plan are very different products.

A Short Term plan may still be the right choice for you right now, but it is not an ACA plan. Be sure you keep in mind what you are and aren’t getting with it.

1 This article uses Short Term Medical plans underwritten by Golden Rule Insurance Company as the basis for the Short Term health plan comparison. Benefits covered by other Short Term health plans may vary.


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