Short-term health insurance is nothing new. In fact, this type of plan has been around for decades now. Most people who would purchase these plans were in a similar position: they needed health insurance for a predetermined period of time and either
1) were unable to pay their insurance and did not immediately qualify Obamacare, or
2) missed the enrollment period for Obamacare plans.
Recent school graduates, people between jobs, and foreign exchange students are a few examples of the type of consumers that would benefit from purchasing short-term health plans. However, with new federal regulations opening the doors for longer lasting short-term plans, others are starting to look at them as viable alternatives for regular health insurance. While this might not be the case, there are many outside of the niche base that short-term plans originally catered to that could stand to benefit from the changes taking place.
What A Short-Term Health Insurance Plan Is For
Short-term health insurance plans are structured very much like ACA plans. They have a deductible, coinsurance, and copays for doctor visits, in some instances. Customers pay a monthly premium, which is more or less expensive proportionally to how much their deductible is. The biggest difference, in addition to cost and ease of application, is coverage. Short-term health plans cover fewer instances and less in total expenses than ACA or long-term plans. So, if short-term plans are structured in essentially the same way, what exactly are they for?
First off, let’s dispel a few common myths. Unlike what many might tell you, short-term health insurance is not simply “catastrophic” insurance. Short-term policies have coverage limits of $250,000 on the low end and $2 million on the high end, approximately, according to Kaiser. Some plans even enforce a per-day expense limit that places a cap on how much the policy can cover in a 24-hour period. Short-term health insurance is also not restricted to healthy people—although they do have a greater chance of being accepted. Additionally, short-term plans are accepted by most medical professionals. They are not the “junk plans” that some would lead you to believe many doctors reject. They are simply more limited in scope and use, although this is changing as well with more short-term plans starting to offer coverage options like prescription drugs and mental health care.
Short-term health plans are at their best when used for covering temporary needs. Say you were paying your own insurance and were laid off or you just aged off your parents’ health insurance plan. These are prime examples of gaps in a person’s life where getting other forms of health insurance would either be too expensive or simply impractical. Short-term health insurance plans are much more affordable than ACA, can be applied for quickly, and start providing their coverage almost immediately after being accepted.
Who Is Most Likely To Be Accepted for Short-Term Health Insurance?
We’ve talked a little about what short-term health insurance is and it isn’t. We’ve also seen some examples of what and who it’s best for. But now, let’s look at who would be an ideal candidate to apply for it. After all, applying for short-term plans costs money, and there is no guarantee that an applicant will be accepted.
1. Healthy people under the age of 65
I previously mentioned how being extremely healthy is not a requirement for qualifying for short-term health insurance. However, I also made note of the fact that, more often than not, healthier people are more likely to be considered than those who suffer from illnesses. Preexisting conditions, in particular, are a big deal for short-term plan providers, as they would rather not pay for the medical issues that could surface from a condition a customer had beforehand. Smoking is another thing to keep in mind. Whereas with most long-term health insurance your premiums might go up, with short-term plans you might be rejected altogether.
Age is also quite important. While 65 is a rough number, the fact of the matter is that those over the age of 60 are more likely to have complications as a result of the body’s natural aging process. Because of this, younger individuals who don’t smoke, and are devoid of conditions that fall into the insurers’ list of “preexisting conditions” are more likely to be accepted.
2. Those who are not expecting
According to a 2018 Kaiser Family Foundation report, there are currently no short-term health plans in the country that provide coverage for maternity care. This means women who are expecting will not receive a single penny for the birthing process—which is a costly affair, to begin with—or for any other expense arising from maternity. Naturally, men do not have to worry about this aspect of short-term plans. Women, however, should be aware of this fact, and although it might not seriously hurt their chances of being accepted to the plan, it is something to keep in mind.
3. Students studying abroad or in foreign exchange programs in the USA (non-domestic students)
Students who have come from abroad to study in the USA are a prime example of candidates for short-term health insurance. They typically only come here for a predetermined period of time, during which they are to focus on their studies. Preexisting conditions could hurt their chances of being accepted but, for the most part, insurance companies expect foreign students to be responsible during their time here. As such, they usually won’t reject foreign students unless they show a variety of factors that could be problematic for the policy.
The Future of Short-Term Health Insurance
One of the chief reasons why people have been swarming to buy short-term health insurance is the newly extended term ranges on its policies. With coverage for a total of 364 days and renewal periods of up to 36 months, short-term plans may look like a fully functional alternative to ACA and long-term plans. This is, however, not the case, as I previously mentioned.
Due to their price and scope, short-term plans will never be an end all, be all solution to ACA plans. Short-term plans are meant to be temporary. On the other hand, people who really do need these plans and fit the profile of the preferred applicant will likely benefit from the longer terms and removal of yearly penalties.
One example of people who will benefit from this is those who are too young to apply for Medicare but are also unable to receive insurance through their employer. Another is middle-class individuals who don’t qualify for Obamacare subsidies but are too riddled by debt to pay the premiums of full insurance. In both cases, short-term insurance might not be ideal, but it can provide a safety net until you are able to acquire more standard, comprehensive insurance.
If you are interested in acquiring short-term health insurance and don’t know where to start looking, we have listed the top short-term health plan providers to make it easy for you. Make sure to consider the pros and cons again of opting for one, and if you need more information, take a look at out other content so we can guide your way.