Short-term health plans offer medical coverage for a specific period of time, usually in exchange for a premium (what you pay per month for having coverage) that is much lower than traditional plans.
These plans are not related to those available on the insurance marketplaces established by the Patient Protection and Affordable Care Act (ACA, also known as Obamacare).
Short-term health insurance generally offers more simplified benefits packages, which include services a healthy person would need in the event of an illness or accident, including coverage for doctor’s visits, hospitalizations, x-rays and other benefits for treatments.
You can purchase short-term health plans at any time, meaning that it’s not necessary to wait for an open enrollment period to sign up.
A healthy family can purchase a short-term health plan that will become effective the day after it is purchased.
A Plan for Undocumented Immigrants
All individuals living in the United States can purchase them, regardless of their immigration status. This is the biggest difference between these plans and Obamacare.
In the past, health care coverage obtained through short-term plans was only good for three months, but now they can be purchased for up to a year, with the possibility of renewing, depending on the state you live in.
In contrast to many traditional health care plans, these policies do not limit your access to doctors and specialists in a network of providers. Consumers can see any doctor or go to any health care center, and make an appointment or have a procedure done.
Some short-term health care plans renew automatically, and for others you have to reapply. There are limitations if you have preexisting health conditions, but it’s important to find out about your specific condition, and you will surely be able to find a plan that’s right for you.
The Obama administration established that short-term health care plans could only be used for their original purpose: as a safety measure before another plan takes effect. They were never intended to be used as a substitute for traditional, long-term coverage.
The Trump administration removed restrictions on these plans. Since October of 2018, federal regulations allow short-term plans to last for up to 364 days, and new federal laws also allow them to be renewed, provided that the total duration of the plan does not exceed 36 months.
This means that under the new rules short-term health care plans:
- Can be sold for initial terms of up to 364 days.
- Can be renewed, but the entire duration of the plan, including the renewals, cannot exceed 36 months.
- Must include a clause that clarifies that short-term health care plans are not compatible with ACA, do not have to cover various essential health benefits, and can have annual and lifetime limits on benefits.
There are also several reasons individuals can be eligible for a special enrollment period in Obamacare when going through special life circumstances, including the birth of a child, a divorce, or a move.
But the conclusion of the term for a short-term health plan does not make you eligible for the special open enrollment period to purchase an insurance plan on ACA marketplaces.