How Short Term Health Insurance Works

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Short Term Health Insurance Definition
Short-term health insurance, also known as ‘Term Insurance’, refers to temporary health insurance policies with a specified time period that lasts from a few months up to one year. These policies were mainly designed to be a bridge of protection for those who don’t have traditional, long-term health insurance. 

When it comes to pricing; short-term health insurance is significantly less costly compared to traditional longer-term plans. However, they do not cover pre-existing conditions. It is important to note that these plans are not meant to replace their longer-term counterparts and are only meant to bridge the gap until you qualify for a comprehensive, traditional type of health insurance.

Since 2010, term insurance was not considered to be adequate under the Affordable Care Act (ACA), which made policyholders liable to tax penalties for being uninsured. This is no longer a thing since the penalty was eliminated under the Congressional Tax Reform Act, as of 2019.

What Does Short Term Health Insurance Cover?
Short term health insurance covers essential medical needs such as hospital care, doctor visits, x-rays, and treatments in case of an illness or accident. On the other hand, it doesn’t cover prescription drugs. Some newer plans offer prescription drug coverage, as long as it’s not tied to a pre-existing condition

Short Term Health Insurance Cost
Term plans are significantly less costly compared to longer-term, more traditional health insurance. These plans are meant to be temporary and aren’t meant to replace traditional health insurance. You can customize your plan according to your needs, which gives you full control of the prices you pay and the coverage you get in return.

Is Short-term Health Insurance Good For Me?
The answer to this question depends on several factors:

Are left without standard insurance coverage, short term health insurance plans might be the answer for you since a longer-term policy may be quite expensive. Short-term insurance comes at a fraction of the price of traditional insurance.

Are looking for a new job or are in between jobs: with the long waiting periods that one has to go through to find a job and qualify for employer-sponsored protection, staying uninsured could be quite risky; this is when short term insurance comes into play. Getting health insurance for short term helps you eliminate the risk of not being ready if the unexpected happens.

Missed Open Enrollment
If you missed the Affordable Care Act Open Enrollment period, short term health insurance can be your safe guard until you can secure a more comprehensive type of coverage

Short Term Health Insurance Penalty
Before 2019, short term health insurance was considered an inadequate form of coverage, which made short term health insurance policyholders liable to a tax penalty. The good news is, this penalty was eliminated under the Congressional Tax Reform as of 2019.