Short-Term Health Insurance: When It Makes Sense and When It Does Not

What a short-term plan is

A temporary medical policy that covers unexpected illness and injury for a defined term. It is medically underwritten, starts within days, and costs a fraction of a full plan. Term lengths and renewal rules depend on your state, and federal rules have changed more than once, so I confirm what is currently allowed where you live.

What it does not cover

• Pre-existing conditions. Anything you were treated for before the plan started is typically excluded.
• Maternity, mental health and prescriptions, in whole or in part, depending on the plan.
• Benefit maximums. There is a cap on what the plan pays.

It is not ACA-compliant coverage and does not come with the marketplace's guarantees.

When it is the right call

1. A known gap between jobs, when the new employer's plan has a waiting period.
2. You missed open enrollment, are healthy, and need something until a private plan is issued or the next window opens.
3. COBRA is unaffordable and the gap has an end date.

When it is the wrong call

• You have any ongoing condition or medication.
• You or a partner may become pregnant.
• You are using it as a permanent plan because it is cheap. One serious diagnosis and the benefit cap becomes your problem.

The better long-term alternative

If you are healthy and need coverage year-round, a private medically underwritten plan costs more than short-term but is real, renewable coverage with a nationwide network. For most people I quote the private plan first and only use short-term for a defined bridge.