Short-term health insurance policies are not designed for long-term use. They typically cost less than regular insurance policies which can seem appealing. However, short-term health insurance policies are typically characterized by the significant limitations on what is covered under the policy and the maximum medical costs they will cover. These policies are not equal to the plans available at HealthCare.gov and should not be used for long-term health care coverage.
According to the Henry J. Kaiser Family Foundation, here are things you should know to understand short-term policies:
- Short-term policies are “medically underwritten,” which means that you can (and likely will) be turned down if you have a pre-existing health condition
- Short-term policies usually have limits for covered benefits, such as limiting the number of visits and the amount that will be paid (the balance will be your responsibility)
- Short-term policies are not subject to cost-sharing limits—as a result, some short-term policies may require cost sharing in excess of $20,000 per person per policy period, compared to the ACA-required annual cap on cost sharing of $7,900 during 2019
- Short-term policies may have limited provider networks or for some policies will require you to pay the between that amount and the actual billed amount (which can be very expensive)
The Pennsylvania Insurance Department urges individuals to examine health insurance policies closely and read any “fine print.” The department has created a brochure that lists important information if you are considering a short-term health insurance plan.
So here’s the 411 on short-term health insurance plans: they can be a good option for some people for a short period of time, but are not meant for long-term use.