If you don’t have health insurance, you aren’t alone. Around 31 million Americans didn’t have insurance in 2020.
Whether you missed the deadline to enroll in a plan or are waiting until you’re eligible for Medicare, there is good news. A short-term health insurance plan can bridge the gap in coverage until you get full health insurance.
What is a short-term health insurance plan exactly, how does it work, and who should consider getting one? We’re guiding you through the answers to these questions and more below.
What Is Short-Term Health Insurance and What Does It Cover?
So, what is a short-term health insurance plan? Health insurance providers designed short-term plans for people needing temporary coverage.
Reasons people need temporary coverage include switching jobs or missing open enrollment. This type of insurance is also ideal for:
- College grads
- People who were laid off
- Young adults who recently lost dependent status
- People who can’t afford individual or COBRA insurance
- Retirees who aren’t eligible for Medicare yet
- Union workers who are currently striking
Those who don’t qualify for Medicaid but can’t afford regular insurance may also consider temporary health insurance. Short-term policies tend to cost less per month than regular insurance plans.
Like the reasons for needing it, short-term insurance plans vary in what they cover. In general, though, temporary plans pay for urgent care, emergency room care, and doctor’s office visits. Many policies also cover preventive care.
Some short-term plans also cover prescriptions, but you may have to pay extra. If you need dental and/or vision coverage, your plan may offer the option to add on these benefits.
How Short-Term Health Insurance in Texas Works
Many short-term health insurance plans in Texas work the same way as regular policies. After you receive care, your short-term insurance provider will pay your provider for services rendered.
Like regular insurance, you pay a monthly premium, meet a deductible, and provide a coinsurance and/or copay for each visit. Some short-term plans offer benefits for seeing in-network providers. And many have a max coverage limit.
The biggest difference between short-term and traditional insurance plans? Regular insurance provides coverage for a year with the option to renew for up to three years. Meanwhile, short-term policies last an average of 60 days.
Short-term health insurance is also different from Medicare and Medicaid. Short-term policies don’t have to adhere to the Affordable Care Act (ACA). That means they don’t have to provide minimum essential coverage.
As such, it’s critical to read the fine print when you’re choosing short-term insurance. Your plan may not cover all the benefits your current health insurance plan does.
If you do choose the wrong policy, there is good news. You have ten days to cancel your policy and get a full refund. After that, you can cancel your plan at any time with a valid reason and get a pro-rated refund.
What Is Considered a Good Short-Term Health Insurance Plan?
A good Texas short-term health insurance plan is any policy that covers the benefits you need. And how do you know if an insurance provider has the coverage you’re looking for? Ask for a summary of benefits and coverages.
The summary of benefits and coverages will tell you exactly which medical services it covers and what you’ll pay out of pocket for. This summary is also useful for comparing and contrasting various short-term policies. For instance, if you have a pre-existing condition, you can find a plan that will cover you.
Another quality of a good short-term health policy is a broad network. Some short-term health insurance plans look like HMOs. And HMOs require you to see physicians and specialists in your network only.
A good short-term policy will look more akin to a PPO. PPOs allow policyholders to choose the physician of their preference. This kind of short-term coverage offers discounts when you do see an in-network provider, but the plus side is that the network is broad and offers more choices than an HMO network.
Finally, the majority of short-term insurance providers put caps on how much the plan will pay out. That means if you incur an expensive procedure, your insurance may not cover the whole thing even if you’ve met your deductible.
Look for plans that have high lifetime coverage maximums. That way, you won’t have to go into debt if you have an accident or other emergency medical need.
What’s the Difference Between Short-Term Health Insurance and Regular Health Insurance?
Regular health insurance is any plan or policy you can sign up for through the ACA marketplace during open enrollment. Otherwise, though, you may wonder: are short-term and traditional health insurance really that different?
Here are the top ways regular-term and short-term health insurance policies differ.
The Approval Process
Short-term health insurance applications get approved much faster than traditional insurance applications.
Regular insurance providers may require you to submit medical records and/or take an exam. Then, you’ll have to wait up to a month for approval.
The short-term insurance application process is quick, with only a few critical questions to answer. Once you’re approved, the plan will start providing benefits within 24 hours of your first premium payment.
Even better, you don’t have to apply for short-term benefits during open enrollment. Unlike ACA-sponsored insurance, you can sign up for a short-term policy at any time during the year.
The downside to the short-term insurance approval process? ACA plans mandate approval. But short-term health insurance providers can deny you based on pre-existing conditions you may suffer from.
The term length for temporary health insurance varies from state to state. In Texas, the average short-term plan offers 30–90 days of coverage and can also be locked in for up to 3 Years of coverage.
With Short Term health insurance in Texas , you can get up to a year of coverage with the option to renew your plan for two consecutive years.
One of the best things about short-term insurance is that it’s cheaper. You can pay as low as $100 per month in premiums. Compare that to the $400+ you must pay for individual insurance.
The only exception to this rule is that you may pay higher short-term health insurance premiums if you have a pre-existing condition. Some traditional health plans forbid providers from raising premiums in this way.
Short-term Health plans trade lower premiums for higher out-of-pocket costs when you do need care. For example, our UnitedHealthOne policies come in two popular plan options.
The first plan covers 80% of eligible expenses once you meet the deductible. Once you’ve accrued $10,000 in coverable services, your plan will pay 100% of your expenses up to $2 million per covered insured.
The second plan looks identical to the first. The difference is that it will pay 100% of your medical costs up to $2 million. You also have the option to add on an accidental death benefit.
With both of these plans, you must pay a high deductible before your start receiving coverage. And even then, you must pay 20% of the costs you accrue for inpatient and outpatient services.
Deductibles for traditional health insurance plans can be much lower. However, if you’re healthy, the lower monthly premiums of a short-term health policy may offset potentially having to pay more out of pocket if you do get sick.
Short-term Health plans tend to have higher deductibles than traditional health insurance. That means you’ll pay more out of pocket before your policy’s benefits kick in.
The average employer-sponsored health insurance deductible is $2,151 for individuals in Texas. Meanwhile, short-term health insurance deductibles can be anywhere from $2,500 to $15,000.
Many short-term plans offer savings when policyholders see in-network providers. Unlike traditional insurance, short-term health insurance networks often extend across the country.
Similarly, most longer-term plans don’t cover international care. With short-term health insurance, you’re covered for medical attention you receive outside of the US once you meet your deductible.
We can’t stress it enough: always check the fine print on short-term health plans. Along with higher self-pay costs, you’re trading more coverage for lower premiums with a short-term health plan. These plans don’t tend to cover:
- Outpatient prescriptions
- Maternity care
- Mental health care
- Substance abuse care
Some short-term health plans also won’t cover certain pre-existing conditions. A pre-existing condition is a condition you were diagnosed with, treated for, or prescribed medication for within the last 5 years.
The most common conditions that could exclude you from short-term policies include cancer, stroke, heart disease, COPD, emphysema, Crohn’s disease, and HIV/AIDS.
Get a Free Health Insurance Quote Today
We hope this health insurance guide has helped you de-mystify temporary coverage. If you’re experiencing a gap in health insurance, a low-cost short-term insurance plan may be just what you need.
Do you need temporary health insurance? Custom Health Plans has been a top health insurance Broker in Texas for over 30 years. Let us help you find the best short-term health insurance plan for you — get a free quote right now!