Short-Term Health Insurance
What Does 'Short-Term Health Insurance' Mean?
Short-term health insurance is a temporary medical plan that covers you for a limited period, typically from a few months up to one year, depending on your state. You might use it to bridge a gap in coverage, such as between jobs or before Medicare eligibility begins.
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Short-term health insurance was designed as a stopgap, not a long-term solution. Because these plans fall outside Affordable Care Act (ACA) rules, insurers can deny coverage for pre-existing conditions and often exclude prescription drugs, maternity care and mental health services. Premiums tend to be lower than ACA marketplace plans, but the tradeoff is thinner coverage and higher financial risk if a serious illness or injury occurs.
Applicants usually answer health questions during the application process, and some may be declined based on their health history. If you have ongoing medical needs, compare your options carefully before choosing a short-term policy.
Availability varies by state. Several states, including California, Illinois, New Jersey, and New York, prohibit the sale of short-term health insurance. Other states permit these policies but may limit how long they can last or restrict renewals. Because regulations change, check with a licensed insurance professional or your state's insurance department before shopping for coverage.
Many people confuse short-term health insurance with Medicare Supplement Insurance or Long-Term Care Insurance, but they serve very different purposes. Short-term plans pay for acute medical care over a brief window. They do not cover custodial care, such as help with bathing, dressing or eating, and they will not pay for care in an assisted living community, memory care unit or nursing home.
If you're planning for the possibility of needing extended care later in life, a Long-Term Care Insurance policy is generally the right tool, not short-term health insurance.