If you’ve been searching for ways to meet the new healthcare law requirements, then you might be tempted to enroll in short-term insurance, also referred to as short-term health plans or STHPs. Before you sign up for temporary coverage, you should take a closer look at what these policies have to offer. Short-term insurance makes a great temporary solution to the problem of not having immediate coverage, but they don’t always fit the bill when it comes to healthcare.
How Does STHP Work?
Like regular insurance, short-term health plans cover a few basic medical services when they come up. Doctor’s visits, emergency care and surgeries are all usually covered by short-term insurance policies. If you need to see a doctor for a cold, then an STHP will work. However, temporary insurance doesn’t cover a lot of other services that regular plans now do under the Affordable Care Act. Prescription drugs, maternity care and even preventive services like routine wellness visits are not typically covered under short-term policies. If you need extensive care or suffer from a pre-existing condition, a short-term plan won’t work for you.
Short-term plans cost much less than regular insurance because they cover less medical care and are not designed to be used like regular insurance. According to a report on short-term coverage costs issued by eHealth.com, individuals paid about $67 per month for STHPs in 2011. Families paid around $153. Temporary insurance is also easy to get and flexible. Most companies offer a range of contracts lasting from 30 days to a full year.
What STHPs Don’t Cover
Under the Affordable Care Act, Americans now have more rights and protections when it comes to health insurance. With regular insurance, you’ll have access to regular preventive checkups, prescription drugs, rehabilitative care, pediatric care and other essential benefits mandated by the law. Short-term health plans do not qualify as compliant coverage under the new law because they do not have to offer these benefits. In fact, STHP insurers can still deny coverage to people with pre-existing conditions and can set lifetime caps on how much they’ll pay in benefits. For a full list of the downsides of STHPs, you can check out our pros and cons list.
Who Benefits from STHPs?
You might wonder why anyone would bother enrolling in an STHP if the plans are not comprehensive enough to cover all of your medical needs, but the primary purpose of temporary insurance is to bridge the gap between coverage periods. A 28-year-old freelance photographer, for instance, might want her own policy because she lives and works on her own and can’t afford any other insurance right now. Instead of buying a costly regular plan or a cheaper catastrophic plan on the marketplace, she could pay for short-term insurance until she grows her business or gets hired as a regular employee somewhere. Short-term health plans aren’t just for the young. Below, we list some people and situations that might benefit from STHPs:
- You’re between jobs, but you don’t want to enroll in the available COBRA coverage.
- You’ve just graduated college, and you may get a job with benefits within the next few months.
- You start a new job that offers insurance, but coverage doesn’t begin until you’re with the company for three months. You need a policy in place during the interim.
Short-term health insurance doesn’t work for everyone, but there are certain types of people that would benefit from temporary coverage. Most major medical carriers offer some type of short-term insurance policy, so you have options for getting coverage that meets your short-term needs.