What is short-term health insurance?

If you are looking to buy health insurance for yourself, you likely know about the Marketplace. There, you can buy Affordable Care Act (ACA)-compliant Obamacare plans. But there are a very limited number of non-Obamacare health plans offered off the health insurance Marketplace, and many of those are known as “short-term health insurance.”

These plans are available for purchase at any time, even outside of Open Enrollment Period. Short-term health plans are only available for purchase through insurance agents, brokers, or directly though some insurance companies and some online insurance sellers. And the coverage they offer is much less comprehensive coverage than ACA-compliant plans. In fact, some states have banned them entirely because their coverage is inadequate. 

Some people believe that short-term health insurance is the only way to get temporary health insurance. They may think that Obamacare plans must be held for a year or more. This is not true. You can enroll in an Obamacare health insurance plan for just a month between jobs, or for many years.

Learn more about what short-term health insurance plans do and do not cover.

Short-term plans cover less than traditional health insurance

Short-term plans cover fewer things than Obamacare plans. The Affordable Care Act mandates that all Obamacare plans cover the essential health benefits. This includes which include pre-existing health conditions, maternity care, emergency services, mental health care, prescription drug coverage, and more. Short-term plans often cover unexpected illness or injury, some inpatient and outpatient hospital services, emergency room visits, and some testing related to preventive care—but they usually do not cover maternity care, mental health, preventive care, prescription drugs, or any pre-existing conditions. Short-term plans may refuse to cover you in the future based on the care you’ve used under their plan.

Can you buy short-term health insurance on the Marketplace?

Short-term health insurance typically does not meet the standards for health insurance as outlined in the Affordable Care Act. That is why these plans are not available on the Marketplace. Only ACA-compliant plans are on the Marketplace, both during Open Enrollment and during Special Enrollment Periods. Keep in mind that whether you are shopping through HealthCare.gov or HealthSherpa, you will never see a short-term health insurance plan. There, you’ll only see comprehensive health coverage.

Marketplace plans offer health insurance coverage for any length of time, short or long. But short-term plans usually entail 30- to 90-day periods of coverage. You may be able to purchase a short-term insurance plan for up to twelve months of coverage. 

Short-term health insurance is often more expensive than an Obamacare plan

The average monthly premium in 2018 for a three-month short-term plan was $107 per month for an individual and $258 per month for a family. Short term health insurance plans often have lower premiums than Obamacare plans. But ACA plans are eligible for government subsidies that often make them more affordable than short-term plans. In 2019, most people who enrolled through HealthSherpa had monthly premiums of less than $50/month for their Obamacare after subsidies, and nearly 1 in 5 of all HealthSherpa enrollees had premiums of $0/month. 

You can shop for an Obamacare plan, see if you're eligible for a subsidy or tax credit, and compare prices here. You can also enter your zip code below to see plans and prices in your area.

Though short-term health insurance plans may be cheaper than some plans offered through the Marketplace if you don’t qualify for a subsidy, keep in mind that short-term plans do not cover as many forms of care, and they also often have high deductibles to meet—meaning that even though the premiums might be cheaper, the cost of using the insurance can be much higher.

Experts do not advise using these short-term plans to replace regular health insurance because the health coverage they provide is not adequate.

Do short-term health insurance plans cover testing and treatment for COVID-19?

Be aware that there is a lot of false information about short-term health insurance plans and COVID-19 testing and treatment. Many short-term plans do not have lab benefits, meaning though an agent may tell you that a short-term plan will cover testing, this is not necessarily true. 

Because no short-term health insurance plans cover pre-existing conditions, if you were at all symptomatic or even had contracted coronavirus and were still asymptomatic at time of enrollment, your plan would not cover any COVID-19-related care. 

While total lifetime benefits for hospital coverage may be up to an amount that would cover hospitalization for COVID-19 care, many short-term health insurance plans have daily benefit limits. And the amount for daily hospitalization would very often exceed that daily benefit limit amount. 

Learn more about COVID-19 and health insurance.

What are my other insurance options for a health coverage gap?

You have several other coverage options.

1. 1. Marketplace/Obamacare plan. You can enroll in a Marketplace health insurance plan, also known as Obamacare or Affordable Care Act insurance. See plans and prices here.
   2. Medicaid. You also may be eligible for Medicaid, depending on your income. You can see if you’re eligible and apply here.
   3. COBRA. If you’ve been laid off recently, you usually have the option of COBRA, where you pay the full premium of the same insurance your employer purchased for you. COBRA is typically much more expensive than Marketplace insurance, but it allows you to continue the coverage you already had. Learn more about comparing COBRA with Obamacare health insurance.
   4. Medicare. Once you turn 65, you’re eligible for Medicare. Call us to enroll at (855) 677-3060.