A short term health insurance plan is one that provides temporary medical insurance to people who need it.
People who retire early, travelers, and young adults no longer covered by their parents’ health insurance are just some of the people who benefit from this type of coverage.
Short term health insurance plans can provide coverage for as few as 30 days or as long as three years, and are typically far more affordable than standard long term insurance.
We examined the most popular of these plans and determined that the following represent the best short term health insurance of 2020.
Rankings
1. UnitedHealthcare
UnitedHealthcare is one of the largest insurance companies in the country. Their finances are on solid ground, and they have a good reputation for transparency. They offer an impressive array of short term plans to fit every budget.
What we like: You can drop their coverage with no penalty if you find something better. They provide up to one year of short term coverage. They boast an extensive network of participating doctors and hospitals.
Flaws: If you venture from their network providers, coverage will be reduced, and in some cases, eliminated. Three years of coverage is not available.
2. National General Short Term Health Insurance
National General provides short term health insurance that allows access to Aetna’s extensive network of more than 5,000 healthcare professionals. You can sign up for a policy today and wake up tomorrow with coverage.
What we like: If you are willing to pay a bit extra, the copays and deductibles become very reasonable. They also offer one of the most extensive provider networks of any company selling short term health insurance.
Flaws: There is little or no coverage for routine doctor visits. And there is no option to cover outpatient prescription drugs.
3. Standard Life Short-Term Health Insurance
Standard Life short term health insurance policies are available in 23 states. While some companies are more widely available, they typically compel you to use their provider network. Standard Life does not.
What we like: We appreciate that you are not bound to a provider network. They also offer an impressive array of plans with small or not-so-small deductibles. Their maximum coverage limit is also higher than many other companies.
Flaws: If you require emergency surgery or hospitalization, you need to clear it with the company, or you will wind up paying a substantial penalty.
4. Everest Short-Term Health Insurance
Everest is a little-known but highly respected and highly-rated insurance company headquartered in Bermuda. They offer a range of short term limited duration (STLD) plans ranging from the very affordable to the relatively expensive.
What we like: Unlike most of their competitors, Everest offers coverage for routine doctor visits. Beyond that, their network coverage is extensive, and they cover emergency room expenses (after the deductible, of course).
Flaws: The provider network is not small, but it is not as large as those associated with other companies.
5. IHC Group Short-Term Health Insurance
IHC offers short term health insurance through an online subsidiary called Health eDeals. IHG issues policies from a number of participating underwriters. The variety of their short term offerings is among the best.
What we like: IHC short term insurance covers everything from diagnostics to emergency care and surgery. They also offer prescription drug coverage in some areas. And you get a discount if you stay in-network.
Flaws: Availability of their different products can vary widely from state to state. Their website is also unreliable.
6. LifeShield Short-Term Health Insurance
LifeShield short term health insurance is available in 30 states. They offer short term plans covering 6 – 36 months. Some of their premium policies offer a wealth of benefits, including outpatient services and enhanced emergency protection.
What we like: If you are willing to pay slightly higher premiums, LifeShield will cover everything from ambulance services to follow-up visits. In some states, they also offer coverage of mental health services and physical therapy.
Flaws: They offer no maternity coverage. Nor do they cover lab costs or most prescription drugs.
7. Agile Health Insurance
Agile provides an easy-to-use platform for comparing short term health insurance from various providers. They have a generally favorable rating, and their website contains a lot of useful information that can simplify your search.
What we like: Agile is an insurance clearinghouse, offering a range of affordable plans from a multitude of short term health insurance providers. If you are pressed for time and need some affordable coverage fast, they can likely help.
Flaws: The policies they offer are mostly affordable. Provided you are in perfect health.
8. Pacific Prime
The primary attraction of Pacific Prime is the attention they give to short term health insurance for travelers. This might seem like a luxury item, but more than a few Americans have been hospitalized while traveling.
What we like: They offer a wide variety of coverage options. Their overseas travel insurance plans are some of the best around. The company is generally easy to work with, and you can be covered in less than 24 hours in most cases.
Flaws: They offer coverage for most eventualities, but they are one of the more expensive companies.
9. Healthcare.com
Healthcare.com is a one-stop-shop for health insurance. Long term, short term, and business plans can all be had here. They feature an impressive array of short term health insurance options ranging from affordable to premium.
What we like: We like the variety of short term health plans available through this aggregator site. Many of them are very affordable. The site is well organized and intuitive and can help simplify the search for the right short term health insurance.
Flaws: They are not an insurance company, so they take no responsibility for the information they provide or any problems you may have.
10. HealthInsurance.net
This is another health insurance marketplace where you will find everything from ACA-compliant long term plans, to minimalist, ready-to-go short term plans. The site is well-organized and easy to use.
What we like: The website is chock full of useful information. They present information on the various plans in a clear, easy to understand manner. And they work with some of the most respected short term health insurance providers.
Flaws: They ask for personal information before providing anything.
Who Needs Short Term Health Insurance?
Short term health insurance can come in handy in a variety of situations. For instance, if you are facing a gap in your healthcare coverage due to losing your job, quitting your job, or retiring early, you may need short term health insurance to tide you over. Also, if you lost your insurance because you moved to another state, or because you went to college in another state, short term health insurance can help. In addition, young people who were dropped from their parent’s insurance when they turned 26, as well as overseas travelers, can benefit from picking up short term health insurance too.
How We Ranked
Because short term health insurance ais subjected to relatively minimal regulation, it is not possible to apply the same criteria to each plan. For example: any insurance plan that aspires to be ACA-compliant must provide 10 non-negotiable benefits (1). Also, a person cannot be denied coverage under the ACA due to a pre-existing condition.
With short term health insurance, no benefits are set in stone, and a person can, and usually is, denied coverage due to a pre-existing condition. So the bottom line is that we had to rank each provider and their plans on their own merits. In doing so, we looked at the reputation of the company and its financial soundness. These were the gateway qualifications.
After that, we examined the various plans they offered and weighed the price of those plans against the benefits. We also looked at availability. Because if a plan is only available in one state, it is not much good to most Americans. Finally, we considered details such as deductibles, copays, maximum lifetime value, and length of coverage. Because, although the law states that a person can have three years of short term health insurance coverage, not all plans or all states allow that.
Benefits
Short term health insurance provides an array of coverage options. With short term health insurance, you can tailor the coverage to fit your personal needs. You can cover potential hospital costs and prescription drugs, or outpatient doctor visits and laboratory services. Some plans will cover mental health services and surgery. You can also choose as little as three months or as much as three years of coverage.
Short term health insurance does not have an enrollment period. With Medicare supplemental insurance or a Medicare Advantage plan, you have to adhere to specific enrollment periods (2). With short term health insurance, there is no enrollment period, and there is no age requirement. College students, working professionals, retirees, and more all choose short term health insurance to satisfy their healthcare needs.
Short term health insurance can be an effective bridge to Medicare. Nearly 20% of Americans retire at 62 (3). But if you are one of them, you will need to arrange for health insurance to cover you until Medicare kicks in. A short term health insurance plan can be a viable option. You can get up to three years of coverage that will protect you and your finances in the event of a health crisis. And that will take you right to 65 and Medicare.
Short term health insurance is more affordable than you think. Many people think short term health insurance must be expensive. Yet that is not the case at all. Plans start as low as $70 a month. Of course, the more you pay, the more coverage you will receive. But even comprehensive short term coverage is still only a fraction of the cost of traditional health insurance. So, you can address your needs without going broke.
Short term health insurance is a smart choice for the self-employed. If you are a successful self-employed individual, a traditional health insurance plan will cost you $500 per month or more in most states. By contrast, you can get short term health insurance coverage for about 1/4 that amount. If nothing else, short term health insurance can ensure you are protected while you decide what to do about long term coverage.
Short term health insurance is a practical solution. The number and variety of short term health insurance plans means there is little or no reason to ever be without health insurance. Even if you are going through a difficult period, you can get a short term plan that will cover the basics starting at a little more than $2 per day for yourself, or $5 per day for a family of four. You can also choose as little as 90 days of coverage.
Short term health insurance offers provider flexibility. Some short term health insurance plans have robust provider networks of participating doctors and hospitals. Others allow you to choose a healthcare provider of your own. Most plans are widely accepted by doctors and hospitals in most states. You should have no problem finding top-quality care with your short term health insurance plan.
Short term health insurance is convenient. Obtaining short term health insurance is fast and easy. In an often confusing insurance landscape, it stands apart as being both simple and convenient. There is no hitching your wagon to the uncertain future of the ACA (4), no insurance marketplaces to navigate, no waiting periods, and no punishing premiums. In many respects, it is what all health insurance should be.
Short term health insurance is a great security blanket. One of the most troubling aspects of being laid off or starting your own business is the uncertainty regarding healthcare coverage. What happens if you or a family member gets sick before you find a new job, or your business takes off? Short term health insurance provides an effective security blanket that keeps everyone safe during periods of transition.
Short term health insurance is available to anyone. Unlike Medicare supplemental insurance or Medicare Advantage plans, anyone can apply for short term health insurance. And lots of people do. For instance, the law states that once a person turns 26, they can no longer be covered by their parent’s health insurance. Many of these young people turn to short term health insurance to tide them over until they can get coverage through work.
Short term health insurance covers prescription drugs. The cost of prescription drugs in the US has gone through the roof in recent years (5). One of the biggest concerns people without health insurance have is how they are going to cover the cost of necessary medications should they get sick. Short term health insurance plans are available that will do just that. And for less than you expect.
Short term health insurance can make sure you are covered if you move. If you lost your health insurance because you moved to another state, short term health insurance can help. It will allow you some breathing room while you settle into your new surroundings, and let you take your time finding the right long term insurance for you in your new location.
Short term health insurance does not have a waiting period. Many health insurance plans have a waiting period you must endure before benefits kick in (6). Depending on the type of plan, that waiting period may be a month, or it may be a year or even two years. That is not the case with short term health insurance. Coverage typically starts as soon as the day after you apply.
Short term health insurance can get your family through a difficult time. Losing a job is never easy. Even when economic times are good, finding a new job can take time. For those with a family, this transition period can be particularly stressful. Short term health insurance provides an affordable way to make sure your family is protected while you go about the process of finding work.
Short term health insurance protects you when you travel. One of the most popular reasons people get short term health insurance is to protect them while they travel. In many cases, standard health insurance will not cover an individual if they get sick or have an accident while traveling overseas (7). At best, they will provide limited benefits. Short term health insurance can ensure your overseas adventure does not turn into a healthcare crisis.
Short term health insurance can cover pre-existing conditions. While this is not true of all short term health insurance plans, there are some that offer to cover your pre-existing condition if you are willing to pay a higher premium. It might seem like an idea that does not make financial sense. But when you consider how quickly medical costs can add up, the extra premium you pay could wind up looking like very small potatoes.
Short term health insurance provides peace of mind. Whether you are buying short term health insurance to bridge the gap between early retirement and Medicare, or to cover you while you travel, its most important benefit is peace of mind. Families facing trying times, young people kicked off their parent’s health insurance plans, and the self-employed can all rest easier knowing their short term health insurance has their back.
FAQs
Q: What is short term health insurance?
A: Short term health insurance (often referred to as ‘STLD’, or short term long duration insurance) helps cover gaps in a person’s healthcare coverage and enables others to make sure they are covered between jobs. It is not intended to be a permanent solution. Most short term insurance plans have large deductibles and do not cover things like prescription drugs, mental health problems, or substance abuse treatments.
Q: Is short term health insurance a good idea for seniors?
A: That depends almost entirely on the person’s age and circumstances. If you are over 65 and able to afford supplemental Medicare coverage (8), that is probably a better way to go. However, if you are not yet 65, have lost your job or have retired early, and do not currently have health insurance, short term coverage may be a smart choice. Especially now that you can get up to three years of coverage.
Q: Isn’t short term health insurance illegal?
A: No. To encourage people to sign up for coverage under the Affordable Care Act (ACA), the government imposed strict limits on short term insurance plans. That had a cooling effect on the industry, and many insurers stopped offering these plans. However, in 2018, President Trump signed an executive order lifting most restrictions on short term health insurance. As a result, short term health insurance has made a comeback.
Q: Am I still penalized if I do not have health insurance?
A: One of the key components of the ACA was the ‘individual mandate’. The individual mandate said if a person did not have health insurance, they would have to pay a penalty. That penalty was effectively repealed in 2018, when it was set to $0. However, the details of that repeal are still being worked out (9). So no, you are no longer penalized if you do not have health insurance.
Q: Is short term health insurance the same as catastrophic insurance?
A: To a certain extent, yes. But there are also significant differences. Whereas anyone the insurance company is willing to write a policy for can get short term health insurance, there are very clear limits on who can get catastrophic insurance (10). Those limits state you must be under 30 and be able to prove you are unable to afford standard health insurance. Also, catastrophic insurance offers low premiums but high deductibles.
Q: Do short term health insurance plans cover everything?
A: Short term health insurance plans do not cover everything a comprehensive long term insurance plan will cover. But, if you are willing and able to pay the required premiums, they can cover quite a bit. Some of the high-end short term plans will even cover mental health expenses and some prescription drugs. Also, the more you pay, the lower your deductible.
Q: Can a college student get short term health insurance?
A: Yes, a college student can get short term health insurance. Oftentimes college students find their parent’s insurance no longer covers them once they enter college. This is particularly true if they attend college in a different state (11). Most HMOs, for example, consider out of state to be out of network. Short term health insurance can pick up the slack for times when an HMO or other types of insurance fail.
Q: Will short term health insurance cover me while I travel?
A: Yes. And, in fact, this is one of the most common reasons people all over the world get short term health insurance. Most standard health insurance plans draw a line at the border. Cross over that line and your coverage decreases significantly. In some cases, it disappears completely. Short term health insurance is available that will provide you comprehensive coverage when you travel overseas.
Q: Can I get short term insurance if I have a pre-existing condition?
A: In most cases, those with pre-existing health conditions cannot get short term health insurance. Because they are considered a form of stop-gap, elective coverage, they are not required to follow the same rules that govern standard health insurance. Therefore, the insurance company can deny anyone for any reason. Or, they can offer to cover you if you are willing to pay a specific price.
Q: What does short term health insurance cover?
A: Plans vary from insurer to insurer, and most benefits involve significant deductibles and copayments. That said, the better short term health insurance plans will cover your hospital room, emergency room treatment, an inpatient doctor visit or two, the cost of an ambulance, surgical services, anesthesia, and treatment for knee or hip injuries. Some will also cover more involved procedures.
Q: How long can you be covered by short term health insurance?
A: In 2017, regulations imposed in an attempt to push people toward ACA-based coverage gutted short term health insurance. A one-time, three-month limit was imposed. In 2018 this limit was removed, and the former definition and limitations regarding short term coverage restored (12). As a result, people can now get an initial short term policy up to a year in length, and renew it for two more years. As a result, they can obtain up to 36 months of short term coverage.
Q: Is short term health insurance available in every state?
A: No, short term health insurance is not available in every state. Four states currently make it illegal to purchase short term insurance. Those states are California, New York, New Jersey, and Massachusetts. In addition, Delaware, Vermont, Colorado, Hawaii, and Rhode Island make it very difficult to obtain this type of insurance. And most companies that sell short term insurance do not operate in all of the remaining states.
Q: Can I use short term health insurance as a bridge to Medicare?
A: Many people who retire before 65 find themselves in a difficult situation. Their work-related healthcare coverage retires with them, and they are not yet old enough to sign up for Medicare. Short term health insurance can provide a much-needed bridge between the time when you retire and the time you become eligible for Medicare (13). And now that short term coverage can be extended up to three years, you have even more flexibility.
Q: What should I look for in a short term health insurance plan?
A: Short term health insurance can provide much-needed coverage to the under-insured, or the temporarily uninsured. But you need to be careful when selecting a plan. Make sure you read all the fine print and that you understand it before signing on. Check deductibles, copays, and the maximum lifetime benefit. Check what it will and will not cover. Also, check to see if there is a network of doctors and hospitals you must use.
Q: Can a young person get short term health insurance?
A: Yes. There is nothing to prevent a young adult from getting short term health insurance. The law states that once they turn 26, young people can no longer be covered by their parent’s health insurance (14). Many people this age do not have jobs that provide medical insurance. So they use short term health insurance to bridge the gap between being forced off their parent’s insurance plan and having long term insurance of their own.
Q: Can I use short term health insurance to protect me if I move?
A: Many people lose their healthcare benefits when they move to a different state. In such cases, short term health insurance can be a good idea (as long as it is offered in the state where you move). The person gets the protection they need for themselves or their family, and has time to get settled before having to wade into the insurance marketplace in their new state.
Q: Can my short term health insurance be canceled for no reason?
A: Because short term health insurance is only loosely regulated, you must read the fine print regarding the cancellation. In the vast majority of cases, insurance companies have no incentive to cancel your short term health insurance abruptly. But they may still retain the right to do so. That said, if you miss a payment, or falsify your medical history, you can be sure they will cancel your policy in short order.
Q: Is short term health insurance the same as COBRA insurance?
A: No. They are not the same thing. COBRA (Consolidated Omnibus Budget Reconciliation Act) is a federal law that requires employers with more than 20 full-time workers to offer health insurance to those let go for reasons beyond their control (15). The worker has the option to retain their work-related health insurance for up to 36 months as long as they pay for it themselves.
Q: Can short term health insurance and COBRA form a bridge to Medicare?
A: If a person has lost their job but retains the right to COBRA insurance it may be possible to use three years of COBRA, plus three years of short term health insurance to bridge the gap to Medicare eligibility. Of course, such a scenario will depend entirely on your age at the time you lose your job and begin your COBRA coverage.
Q: How much does short term health insurance cost?
A: Short term health insurance is surprisingly affordable. For example: the average cost of comprehensive health insurance in an ACA exchange is, on average, four times as much per month as short term insurance. And that is true whether you are buying insurance to cover just yourself or your entire family.
Q: Should I get short term health insurance?
A: That is something only you can decide. But if you find yourself currently uninsured or under-insured, it is something you should definitely consider. If you are, say, 60 and have retired early or lost your job for whatever reason, short term health insurance makes sense. If you are 25 and between jobs, you may want to consider other options, simply because the need will not be as pressing.
Q: Can I get three years of short term coverage in every state?
A: Because short term health insurance is not regulated, plans vary considerably from insurer to insurer and state to state. You may be able to obtain three years of coverage in one state, while in an adjoining state, short term health insurance is illegal. Some states also impose their own limits on the duration of short term health insurance plans. You will need to determine exactly what is available in your state before you purchase a plan.
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Recap
Short term health insurance can help bridge the gap in healthcare coverage when someone is laid off, downsized, or retires early. It is not meant to be a permanent solution. However, due to recent changes in the law, you can now obtain up to three years of continuous coverage in some areas.
Short term health insurance does not cover everything, and it typically comes with hefty deductibles attached, but it can help ensure an unexpected health crisis does not sink you financially. If you are facing a period of uncertainty regarding your health insurance, short term coverage could be just what the doctor ordered.
For cpoe.org’s #1 recommended short term health insurance, click here.