Short-term health insurance is one method to obtain temporary coverage if you’re facing a hiatus in coverage—possibly because you lost employer-sponsored coverage or because you’re awaiting the start of open enrollment. According to Louise Norris, a Colorado-based registered health insurance agent and the author of The Insider’s Guide to Obamacare’s Open Enrollment, it is meant to “bridge a short gap in coverage between other plans.” However, it can be difficult to find short-term health insurance on your own. So, in order to assist you in weighing your alternatives, we completed the preliminary research and listed the top short-term health insurance providers for 2021. See which suppliers made our list by reading on.
The Forbes Health editorial team looked at U.S. insurance companies that provide plans nationally and assessed them based on factors like the number of states they offer coverage in, the size of their provider networks, the starting prices for physician copays and specialist copays, the benefits their plans include, and their reputations with organizations like the Better Business Bureau (which focuses on customer satisfaction).
Short-Term Health Insurance Definition?
Short-term health insurance is exactly what it sounds like—a policy that offers short-term protection, often lasting from a few months to a year. The Affordable Care Act (ACA) does not regulate short-term health insurance, so plans are not required to offer the basic health benefits as required by the ACA. (These advantages include mental health treatments, prescription drug coverage, inpatient and outpatient hospital care.) Pre-existing conditions are not also required to be covered by short-term policies. The plans are intended for healthy individuals and typically feature restrictions on the amount members would pay for particular services or overall.
Although certain states have stricter regulations regarding duration, short-term health insurance plans can have initial periods of up to 364 days and be renewed for up to three years. In contrast to the open enrollment period for marketplace plans, which is only available once a year, you can enroll in this temporary coverage at any time during the year. The following groups, according to Josh Archambault, CEO of Presidents Lane Consulting in Massachusetts, frequently benefit from short-term plans:
- The previously uninsured
- Individuals between jobs or waiting for employer-based coverage
Who Qualifies for Short-Term Health Insurance?
According to Norris, anyone who can pass the medical underwriting requirements of an insurance provider can purchase a short-term health insurance plan. According to her, “this usually means being under 65 years old and in reasonably good condition.” Underwriting describes the process an insurance provider uses to assess your health in order to determine whether to offer you coverage, how much it will cost, and what exclusions it will include. According to Norris, there are 11 states where short-term health insurance plans are not available “either because they have outlawed them or because they have adopted standards that are so rigorous that insurers have chosen to not offer plans there.” California, Colorado, Connecticut, Hawaii, Maine, Massachusetts, New Jersey, New Mexico, New York, Rhode Island, and Vermont will no longer offer short-term coverage as of 2021.
How Do You Qualify?
In general, you don’t need to do anything to be eligible, according to Archambault. Simply enroll and pay for coverage. According to Norris, “very limited medical underwriting” is used during the application process for the majority of short-term health insurance plans. They typically only ask a few yes/no questions about serious medical concerns, and they will provide coverage to anyone who can do so. Short-term plans frequently use “post-claims underwriting,” which means that when you submit a new claim, the insurer will frequently check your records to make sure it isn’t related to a pre-existing condition, continues Norris. If so, she explains, “they have the option to reject the claim or even terminate the coverage.”
How Much Does Short-Term Health Insurance Cost?
In general, major medical plans are more expensive than short-term health insurance. According to Archambault, these plans often cost between 50% and 80% less than conventional individual market coverage. According to Norris, the price of a short-term health insurance plan will change depending on your age, where you live, and the type of coverage you choose. Pricing for short-term policies can start at little under $10 per month, she continues, but plans with more comprehensive coverage are more expensive. One factor that makes this sort of health insurance appealing to certain people is its affordability.
What Does Short-Term Health Insurance Cover?
According to Norris, short-term health insurance typically pays for unanticipated medical need including hospitalization and operations. But she emphasizes that they are frequently basic plans with low maximums, which could leave you with a mountain of debt. It’s crucial to study the details of your plan and understand what it covers before enrolling.
How to Choose the Best Plan for You
Be aware that there may be alternatives to short-term health insurance if you’re thinking about getting it. For example, if you experienced a qualifying life event, like losing your job, you may be entitled to enroll in an ACA-compliant plan through the marketplace at any time. Short-term coverage shouldn’t be relied upon in too many situations, according to Norris. If you’ve determined that short-term health insurance is the best option for you, there are a number of things to think about to make sure you’re selecting the finest plan for your requirements. Norris advises posing the following inquiries to yourself:
Exists a provider network for the plan?
In the event that it doesn’t, be aware that medical professionals may charge you in full, warns Norris.
Does the plan offer any coverage before the deductible is met? How high is the deductible?
If not, think about your ability to pay the deductible out of pocket if necessary.
Deductibles differ significantly amongst plans.
According to Norris, there are short-term policies with $1,000 deductibles and those with $10,000 deductibles.
(Starting in 2021, ACA-compliant plans must cap out-of-pocket expenses at $8,550; however, short-term plans are exempt from these regulations.)
Additionally, make sure your copay fits into your budget by checking it.
COBRA vs. Short-Term Health Insurance
The Consolidated Omnibus Budget Reconciliation Act (COBRA), which compels insurers to provide a temporary continuance of the same health insurance that would otherwise be terminated, allows you to enroll if you lose health insurance coverage via your work. The same medical, dental, and vision benefits that came with your employer-provided insurance are still available to you. The monthly premium will no longer be partially covered by your former employer; instead, you will be required to pay the full premium plus an administrative charge.