What are the pros and cons of short term health insurance?

3 min. readlast update: 08.06.2023

Short-term health insurance plans can offer temporary coverage for individuals who are in between jobs, waiting for employer-sponsored coverage to start, or facing other transitional periods. However, these plans also come with limitations and potential drawbacks. Here are the pros and cons of short-term health insurance:

Pros of Short Term Health Insurance Plans

  1. Affordability:Short-term plans tend to have lower premiums compared to comprehensive health insurance plans. This can make them an attractive option for individuals looking to save on monthly costs.
  2. Flexibility: Short-term plans offer flexibility in terms of coverage duration. You can typically choose coverage periods that suit your needs, ranging from a few months to a year.
  3. Quick Enrollment: Short-term plans often have minimal application requirements and may provide coverage within a short time after enrollment.
  4. No Open Enrollment Period: Unlike Marketplace plans, short-term insurance is available year-round, which can be beneficial if you miss the annual open enrollment period for other health insurance options.
  5. Choice of Providers: Short-term plans may allow you to visit a wide range of healthcare providers without the need for a referral, giving you more control over your healthcare decisions.

Cons of Short Term Health Insurance Plans:

  1. Limited Coverage: Short-term plans are not required to cover the essential health benefits mandated by the Affordable Care Act (ACA). As a result, they may exclude coverage for certain services such as prescription drugs, mental health, maternity care, and preventive services.
  2. Pre-existing Conditions:Short-term plans often do not cover pre-existing conditions. If you have ongoing medical needs, you might not receive coverage for those conditions.
  3. No Guaranteed Renewal: Short-term plans are generally not renewable, and you may need to reapply and undergo medical underwriting if you want to extend coverage. This means your eligibility could change based on your health status.
  4. High Out-of-Pocket Costs: Short-term plans usually have higher deductibles, coinsurance, and copayments. This means you might be responsible for a significant portion of your medical expenses before coverage kicks in.
  5. Limited Benefits: Coverage for certain services, like prescription drugs or preventive care, may be minimal or nonexistent in short-term plans.
  6. No ACA Protections: Short-term plans do not have to adhere to ACA regulations, which means they may have annual or lifetime limits on benefits, and they can exclude coverage for certain conditions.
  7. Not Suitable for Long-Term Coverage: Short-term insurance is designed to provide temporary coverage. It's not a suitable long-term solution for individuals who need consistent and comprehensive healthcare.

In summary, short-term health insurance can be a cost-effective option for temporary coverage, but it comes with limitations in terms of covered services and pre-existing conditions. It's important to carefully review the terms and limitations of the plan before enrolling. If you have ongoing health needs or need comprehensive coverage, exploring other options like Marketplace plans or Medicaid might be more suitable.

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