5 factors to consider when purchasing short term health insurance
At the end of last year, new rules went into effect regarding short term health insurance plans (limited-duration plans that can help fill a stopgap in coverage) that extended continuation from three months to 364 days. While these plans are great choices for most people, it’s important to be informed about what short term health insurance does and does not offer, and shop carefully to find the right solution for your individualized needs!
Here are five things that you should know about short term health insurance before you purchase:
- Short term health insurance plans are significantly cheaper than ACA plans, and there is no tax penalty. There are a variety of policies available to you, and you have options to reduce your premiums based on the one you select. If your household income is below the federal poverty level, if you’re facing high premiums because you do not qualify for a subsidy, or if you cannot afford to add dependents to your employee-sponsored plan, short term health insurance may be an option you want to explore.
- Pre-existing conditions are not covered. The reason why short term medical coverage is less expensive is partially because these plans are medically underwritten, and insurers do not have to pay for treatment related to conditions that you received a diagnosis for within the last 2-5 years (ACA plans do). If you have a chronic condition or a complex medical situation, a short term policy may not meet your needs.
- It’s adaptable, but not comprehensive. ACA plans require 10 essential health benefits to be covered in every major medical plan (e.g., maternity care). Anyone who buys a major medical plan is paying for all of those services, some of which they will never need. However, short term medical insurance only offers certain services, so you only have to pay for what you need. It does not cover maternity or mental health, though, and serious illnesses may not be covered. Preventative care and prescriptions are only covered under some plans, although dental, vision, and critical illness plans can be commonly paired with short term plans. It’s important to know the specific details of your policy’s coverage. Americare Quotes can help you understand the benefits covered by your plan and match you with one that is right for you!
- You have flexibility; you can typically choose to see any doctor you prefer, although there may be financial incentives to see an in-network provider. You can also cancel your plan at any point without a penalty, in case that you don’t need coverage for as long as you expected.
- Your family can be covered, too. Spouses and dependents are covered, but because short term health insurance does not cover pre-existing conditions, they will each need to meet medical standards, and not all health services that dependents may need (e.g., oral and dental pediatric care) are covered under all short term plans.