How Long Do Short-Term Health Insurance Plans Typically Last?

Insurance Coverage Mix Reimbursement Protection Concept

For many American individuals and families that don’t qualify to receive subsidies, the cost of health insurance has become very unaffordable. Many are left wondering about the possible affordable health insurance solution available to them. This is because if you are unable to enroll for Affordable Care Act Open Enrollment Period–usually running between early November and mid-December – you cannot purchase ACA supported health insurance unless you meet the criteria for a Special Enrollment.

You can, however, purchase a Short Term Health Insurance cover at any time in the course of the year and begin to receive health coverage as soon as the following day. Short-term health insurance plans are meant to offer the insured temporary coverage for nearly all what you would get with a standard health plan. There are, however, exceptions.

The Cost Implications

Short-term plans certainly bring some savings to the insurance buyer because typically their premiums are substantially lower than ACA plans. With short-term health plans, you stop receiving health benefits as soon as the plan expires. Additionally, buying a short-term health insurance plan disqualifies you from any government supported HIPAA plans.

What Do Short-Term Plans Cover?          

Short-term plans, as noted above, don’t cover as much as you can receive from a normal health insurance plan because they are ideally not designed to replace your long-term health plan. They are designed to cover anyone who either cannot afford long-term insurance or one who has to wait for their long-term plan to come into effect. However, they don’t cover aspects such as maternity care, preventive care or other pre-existing medical conditions. 

It’s important to point out that people who have previously experienced a major medical condition or significant health event in the past five or so years may find it challenging to get a short-term health plan that will accept them or agree to cover their pre-existing condition. 

In 2017, the period of coverage for short term health insurance plans was limited to a max of 90-days. It was hoped that healthy people who were not in need of the more comprehensive Obamacare (ACA) plans would stop flooding the market in favor of the cheaper and skimpier short-term plans. This limitation was meant to hopefully keep Americans from using these shorter plans as their primary coverage.

Reversed Limits 

Under former President Barrack Obama, short-term health insurance plans were restricted to three months or less to ensure Americans only used them as temporary measures. But recently, The Trump administration has, however, reversed these limits, reverting back to the earlier 364-day model. More importantly, Americans now have the option to renew their short-term plans up to 3-years.

In response to these changes introduced by the Trump administration, several states across the US have initiated legislation to further cap short term policies – or to altogether eliminate them as an option.

Conclusion

The Trump Administration recently made several important changes to short-term health coverage with the goal of increasing their appeal to Americans. More people are now beginning to view these plans as a viable and affordable alternative to buying comprehensive health insurance plans as their coverage duration has been extended 364 days.