Short-term health insurance is a limited-time insurance policy that’s best-suited for times when life leaves you without a comprehensive individual health insurance plan. These temporary health insurance plans can start the next day. Your affordable short term gap insurance can last for 30 days, 90 days, or almost a full year.
Applying for a short-term health insurance plan is fast and easy. It only takes approximately 24 hours to obtain coverage. These plans are generally network-free, meaning you can see any physician or clinic you wish, without worrying about a particular doctor being in- or out-of-network. Should you obtain individual health insurance coverage while your short term medical coverage is still in effect, you can contact your health insurance company to cancel at any time.
Cheap short-term plans are a great option for people who become uninsured due to things like extensive travel, job loss, divorce, insurance mishaps, or early retirement. They provide limited health insurance until such time as your circumstances change. Things like new employer coverage, qualifying for Medicare or Medicaid, or finding permanent health insurance elsewhere can provide a good reason to leave your short-term plan.
It is important to know that short term health insurance is not considered a “qualified” health insurance plan under the Affordable Care Act. This means that enrollment is not guaranteed, and some benefits like maternity care or prescription drugs will probably not be covered by your short-term plan. However, as of 2019 you no longer have to pay a tax penalty for choosing to avoid qualified health plans (except in DC/MA/NJ).
Current federal rules limit short-term medical plans to 364 days of coverage under one certificate of insurance. Some insurers will allow you to apply for multiple additional new certificates of insurance – with each certificate granting another 364 days of coverage at a time. State rules may vary. Each coverage period you apply for will have an effective date that starts the next day after your previous coverage expires.
Short term health insurance is so affordable because it is temporary coverage. However, it is possible to apply for a second short-term insurance policy once the original policy terminates. Rules vary state by state, so it pays to check and see if you can enroll in another plan if you life situation is still unresolved by the time your original coverage terminates.
Here’s a partial list of life situations when a short-term health insurance plan can fill gaps in coverage:
- Job loss
- Employer eliminates group employee health insurance benefits
- Waiting for new employer health coverage to begin
- COBRA insurance is too expensive
- Getting divorced
- Turning 26 and being removed from parent’s health plan
- Graduating college without health insurance
- Student insurance offered by college or university isn’t adequate (or isn’t offered)
- Missed the open enrollment period to sign up for an individual ACA plan
- Returning from active duty in the military
- Part-time worker who doesn’t qualify for employer health benefits