Short-Term Health Plans
If you’re in the market for health insurance, you may have heard about short-term plans. These plans provide temporary coverage. They can be helpful in keeping you covered if you are waiting for new insurance to take effect or if you need a plan outside of Open Enrollment. However, you should carefully consider the drawbacks of these plans before you purchase one. Short-term plans provide less coverage and more limitations than plans that comply with the Affordable Care Act, such as those offered by UPMC Health Plan.
What is short-term health insurance?
Things to keep in mind with short-term plan coverage:
- You can be denied coverage if you have a pre-existing condition. This is a health problem you had before you secured health insurance.
- You’ll have a new plan each time you renew your coverage. Medical conditions that arose under your initial short-term plan may not be covered under your new plan.
- There may be no limit on out-of-pocket costs.
- There could be annual and lifetime benefit caps.
- There is no requirement to provide essential health benefits.
What does short-term health insurance cover?
Short-term health insurance plans cover various inpatient and outpatient services. However, they often have significant limitations compared to standard health insurance plans. For example, they typically cover doctor visits that allow you to see a health care provider for consultation and treatment, including surgery. However, they may limit coverage for preventive services and prescription drug medications.
They also generally cover visits to the emergency room and urgent care facilities. If you need to be admitted to the hospital, short-term health insurance plans may cover these services. If you need laboratory and diagnostic services, such as blood work and x-rays, short-term plans often cover them. These plans may also include some level of telehealth coverage for virtual visits with health care providers.
If you are considering a short-term plan, it is important to compare them because coverage can vary from plan to plan. Comparing plans can help ensure that you make an informed decision before you purchase a plan.
How long can you have short-term health insurance?
Because short-term health insurance plans are designed to help bridge coverage gaps, they provide only temporary coverage. Initial coverage for short-term plans is typically less than 12 months.
Who qualifies for short-term health insurance?
Not everyone qualifies for a short-term health insurance plan. You typically qualify for one of these plans if you:
- Are transitioning to a new job or waiting for other health insurance to begin.
- Are a college student.
- Are not covered under an ACA plan.
- Are younger than 65.
Understanding short-term health insurance costs
Out-of-pocket costs can vary with short-term health insurance plans. They are oftentimes higher than those of ACA-compliant plans and may not cover essential health benefits. In general, short-term insurance plans have the following out-of-pocket costs:- Premium. This is the amount you must pay to maintain an insurance policy. It is often paid in monthly installments
- Deductible. This is the amount you owe for covered health services before your health plan begins to pay. The deductible may not apply to all services.
- Coinsurance. This is the percentage of the cost of your health care services that you must pay after you’ve met your deductible.
- Copayments. This is a fixed fee that you must pay for a covered health care service, usually at the time you receive the service. Copayments may vary by the type of
- service you have.
Can you renew short-term health insurance?
Yes. You can renew a short-term health insurance plan, but the total coverage duration, including extensions, cannot exceed 36 months. Before you renew a short-term plan, it is important to remember that they are not required to cover the essential health benefits mandated by the Affordable Care Act (ACA) and do not have to provide an appeals process for denied claims like ACA-compliant plans do. There is often no limit on out-of-pocket costs for these plans, so care could be very expensive if you need extensive medical treatment.
ACA vs. short-term health insurance
Short-term plans have much lower premiums than plans that comply with the ACA because they provide much less coverage. Depending on your income, you may qualify for a subsidy that makes an ACA-compliant plan more affordable.
You should also be aware that ACA Open Enrollment will take place between Nov. 1, 2024, and Jan. 15, 2025, for coverage in 2025. If you sign up for a short-term plan and decide you need more comprehensive coverage after Jan. 15, 2025, you may not be able to get an ACA-compliant plan until Open Enrollment 2025. That means you may have a gap in care or be stuck with bills for medical care you received that’s not covered by your short-term plan.
Get full medical coverage with UPMC Health Plan
Benefits of UPMC Health Plan coverage over short-term health care coverage:
- Maternity and newborn care
- Mental health treatment, including for substance use disorders
- Routine office visits
- Prescription drug coverage
- Preventive care
Bottom line:
Short-term plans can look like an affordable option, but if you end up needing care you may be in for an unpleasant surprise. The cost of the medical bills you incur for services the plan doesn’t cover may far exceed the premiums you would have paid for an ACA-compliant plan.
With UPMC Health Plan there are no lifetime limits on benefits, the coverage is extensive, and there is no denial of coverage or increased costs because of a pre-existing condition.