Short Term Health Insurance
Short-Term Health Insurance, for a few months, or full year.
Short-term health insurance plans are simply health insurance plans designed to start quickly (many health insurers offer short term coverage to begin as soon as the next day after enrollment) and end in a shorter time span (as little as 1 month or up to 12 months). The health insurance coverage is simpler also, usually a deductible and coinsurance plan type without a lot of extras.
Short term health insurance was initially designed to act as stop gap coverage between two health insurance plans, usually for someone between jobs and employer-sponsored coverage. We still utilize short term health in that scenario, but also in many others, including choosing short term health insurance for the full year, as a much lower cost alternative to ACA health insurance. Keep reading for more details.
Four Benefits of Short Term Health Insurance Plans to Keep in Mind
Budget Friendly Prices
The premium costs of short term health insurance are usually the least when compared to other options.
Next Day Coverage
If we enroll you in a short term health insurance plan today it can start as soon as tomorrow.
Fast Quote and Enrollment
Quotes of plans to review, and enrollment in plans can all be accomplished online quickly.
Choose Coverage Year Round
No dates to wait for, or reasons to apply. You can enroll in short term health insurance at any time.
Six Reasons People Choose Short Term Health Insurance
Losing Job-Based Health Coverage
You may have left your job, laid off, or furloughed. So your employer-sponsored health insurance is ending. COBRA may be an option, but is usually expensive. Or you may be waiting for your new employer’s health insurance plan to begin in a few weeks or months.
Short Term Health Insurance is a great stopgap, covering you with affordable coverage in the interim. The plan can end just as your new coverage begins.
No Tax Credits, or Waiting for Medicare
Many individuals and families do not qualify for tax credits with Affordable Care Act plans, and so ACA-compliant health insurance coverage is expensive!
For many of our clients, short term health insurance is a great alternative. The coverage works well at a much lower premium cost each month.
College Graduate, or 26th Birthday
If you are finishing up at college or university your student health insurance does too. Short term health insurance can cover you until an employer-sponsored health plan begins.
If you are about to turn 26 and are still covered by your parent’s health insurance plan, your coverage will end on your birthday! Short term health insurance is a great way to get covered immediately, and at a low cost.
Missed or Waiting for Open Enrollment
You may have missed “open enrollment” for enrolling in an Affordable Care Act health insurance plan, and do not have a SEP reason to enroll. Or you may be waiting until your spouse’s open enrollment period at work opens again.
There is no reason to go without needed health insurance while you are waiting. You can choose short term health insurance for now.
Waiting for Medicare
Individuals and couples sometimes retire a year or two earlier than their 65th birthday, and need to choose health insurance. COBRA is expensive, and their higher income(s) put them out of range for ACA tax credits.
Short-term health insurance can be an great alternative, with a lower premium cost than other choices all while providing strong health insurance coverage.
A Better Provider Network
In the Triangle of North Carolina (Chapel Hill, Durham, Raleigh, and surrounding areas) health insurance plans available to individuals and families through the ACA Marketplace offer restrictive networks that only feature UNC Health or Duke Health, not both.
Short Term Health Insurance plans utilize larger group networks and can offer in-network access to both Duke Health and UNC Healthcare.
Short-Term Health Insurance (an overview)
Why is short-term health insurance so popular right now?
When the Affordable Care Act began in earnest in 2014 part of the new laws really held short-term insurance back, in terms of plan length, and also because people who chose short-term health insurance were subject to the tax penalty for not having ACA-compliant health insurance. But those parts of the law have been waived, so you can choose this short-term health insurance coverage free of that tax penalty, and for up to a full year.
So short term health insurance can currently compete with the other options for those choosing their own health insurance.
What does the plan design look like?
Short-term health plans are very similar to a high-deductible style plan…a deductible you pay the medical expenses up to, then the insurer pays 100% afterward.
People who are not above average users of health insurance like this option as the premium cost is much less, and the plan offers great coverage when something major or unexpected happens, as many times, depending on the deductible you choose, the out of pocket maximum medical cost you could be liable for is much less than ACA health insurance plans. You cap your out of pocket as low as $2,500.
And even in that deductible period, when you are paying for the medical costs, there are benefits of having the plan! That is because you do not pay the “retail cost” of those visits, hospital stays, surgeries, prescriptions, etc. You pay the discounted cost, the much lower cost the insurer has negotiated with the provider.
Short term plan designs do add in some copays, such as for doctor visits, urgent care and prescriptions. Though adding these things in raises the premium cost.
How are the provider networks?
There are many insurers offering short-term health insurance, including health insurance companies have built strong nationwide provider networks for their other insurance plans. Amazingly, they utilize those same provider networks for their short-term plans. That means that currently in North Carolina, these provider networks are larger than the networks ACA health insurers offer!
How much of a cost difference is there between short-term and ACA health insurance plans?
It all depends on which plans you are comparing to each other, but short-term health insurance monthly premium costs can be 15-50% lower than plan premium costs for ACA health insurance plans.
Disadvantages
There are so many superlatives to talk about with short term health insurance. But the coverage is not perfect. Here are three disadvantages when compared with other available health insurance options.
The Coverage is Underwritten.
Short term health insurance coverage is not guaranteed. The enrollment form does ask a few health questions, and asks for your height and weight to compare to charts. The enrollment process could end in declined coverage from the insurance company.
There are Benefit and Plan Limits.
Short term health insurance differs from Affordable Care Act (“Obamacare”) insurance in that the set of 10 essential benefits as mandated by the ACA do not have to be covered by short term health insurance. Though most are covered, two that are not include mental health and pregnancy benefits.
Short term health insurance plans can also place caps on coverage. Where as ACA health insurance plans offer unlimited maximum lifetime benefits, with short term health insurance the maximum lifetime benefits are usually capped at $1 million or $2 million.
The plans do not automatically renew each year.
Most health insurance plans automatically renew each year, unless you change or cancel the insurance plan. This may not seem like a big deal, but it is just peace of mind, knowing you will not wake up without coverage one day because you forgot to buy new health insurance!
Short-term health insurance does not automatically renew. We have to set reminders each year to review and choose new coverage as the old plan comes to an end.
Three Recent Examples of Clients Choosing Short Term Health Insurance
If you are curious as to what these plans look like for those choosing them, here are 3 examples.
College Graduate
Ana graduated from college in May, and started her first job in June. But the employer-sponsored health insurance that is part of her employee benefits package does not begin until September 1.
ACA health insurance is expensive as she did not qualify for tax credits. The plans range in the $250-300 range.
We chose a short term health insurance plan with a $5,000 deductible, then 100% paid for by the insurer, and the monthly premium cost is $143.98.
A Couple in Their 60’s
Simon and Mary are both 63, and are “semi-retired,” now growing vegetables on their hobby farm and selling at local farmers markets. They can’t wait for Medicare eligibility at age 65.
Their coverage in the meantime was an ACA health insurance plan without tax credits, $1455.09 monthly!
We chose a short term plan for the full year with a $7,500 deductible (what their previous plan had), and the monthly cost is $589.34. Much less!
A New Job
Victor is an attorney, age 35, and recently took a job with a new firm, a step up for his career. The new employer, like most had a 90 day waiting period before employer-sponsored health insurance began.
He could have chosen the COBRA health insurance from his prior firm, but the cost was $623.22 monthly!
We chose short term health insurance with a $2,500 deductible, then 100% paid by the insurer. The monthly premium cost for the entire 3 months is $244.10.
Shop Short Term Health Insurance Plans Now
If you think a short term health insurance plan might work for your situation, and would like to see more details, specifically the benefits and premium costs of available plans, you can get started now, in a way you fee most comfortable with by choosing one of the two options (you even choose and enroll in coverage today).
Option 1: Click on the “Get Quotes Instantly” button below for instant access to short-term health insurance quotes.
Option 2: Contact Chip through the below quote request form by completing and submitting it. He will respond quickly with personalized quotes for you along with recommendations of what works best.
Free Short Term Health Quote and Info
Complete the form below and Chip will send you an email with recommended quotes of short term health insurance (including detailed ideas of premium costs and benefits). All in a simple, conversational explanation. You can review the information, then follow up with your questions via email, phone call, text, or Zoom / Facetime.
Note: Privacy is something we take seriously, and keeping the information you shared private is of utmost importance to us. We do not share any information with third parties. The minimum of information is shared with an insurance company to put together a detailed free quote and illustration for you.