Short Term Health Insurance FAQ

HealthCare Writer

Updated on February 17th, 2021

At, we want to make health insurance easy to understand so you can make better decisions. This post may have links to lead generation forms or direct you to our trusted insurance brokers, which is how we make money. However, this will not influence our writing.

What is short term health insurance?

Short term health insurance is an affordable option that helps provide temporary medical insurance coverage through any transition period when you find yourself without major medical health insurance. You choose the length of coverage, from 90 to 364 days, depending on your state of residence, what deductible amount you wish to have, and how you would like to pay, either monthly or in one lump sum (pre-payment is typically reserved for coverage of 90-days or less). This type of temporary health insurance plan is not considered an Obamacare plan, meaning it doesn’t meet all of the requirements of the Affordable Care Act (ACA), but due to new administration rules, you will not be subject to a tax penalty if you do not carry an ACA plan.

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Availability of plans and policy duration vary by state

How long is the “short term” period with this type of health insurance?

Depending on your state of residence, alternative health insurance like short term medical insurance plans can span from just 30 days to 364 days. This makes short term insurance extremely flexible for your needs when life leaves you uninsured or just wanting a more cost-effective option.

Is short term health insurance known by any other name?

Yes, the product can be referred to as short term medical or “STM,” temporary health insurance and term insurance depending on the preference of the selling insurance company or marketing agency.

Is short term health insurance the same as individual health insurance?

No, there are differences between short term insurance and permanent individual insurance, also known as major medical health insurance. Short term health insurance does not offer essential health benefits as required by the Affordable Care Act, also known as Obamacare. However, you no longer are at risk for paying a tax penalty if you don’t carry ACA coverage. Short term health insurance is typically more affordable than major medical health insurance and allows individuals to see any doctor or hospital they choose without worrying about in-network vs. out-of-network physicians and facilities that are standard with individual health insurance plans. Some short term medical plans do have a PPO network, so it’s important to carefully review the benefit details of policies you are interested in to compare.

Is short term insurance the same as an Obamacare plan found on the marketplace?

No, short term health care is different than Obamacare plans, and cannot be purchased on the marketplace exchange. Health insurance plans on a state exchange, the federal marketplace or in the private marketplace are major medical policies that offer 10 essential benefits required as a result of the Affordable Care Act. Short term health insurance is not required to offer these 10 essential health benefits but still offers some coverage for many of the same services.

Who should buy short term health insurance?

Short term health insurance to regular insurance when you are temporarily uninsured! Here are the different life situations where short term medical insurance can fill the gap in coverage:

  • Loss of employment
  • Employer drops employee health insurance benefits
  • Waiting period before new employer healthcare coverage begins
  • Alternative to more expensive COBRA insurance
  • Marriage or divorce
  • Turning 26 and losing coverage from parent’s health plan
  • New college graduate and without medical insurance
  • College student insurance alternative
  • Missed the Obamacare marketplace open enrollment period
  • Returning from military duty
  • A part-time worker without employer health benefits
  • Desire cheap health insurance over marketplace insurance plan

Is short term health insurance cheaper than marketplace insurance?

Traditionally, yes. It’s always important to check to see if you qualify for a financial subsidy on a marketplace health insurance plan before committing to a short term health insurance plan. If you do not qualify for cost assistance on an Obamacare marketplace plan, short term can provide a more affordable insurance option so you don’t have to go uninsured.

Can I get a financial subsidy when I buy short term health insurance?

No, short term medical insurance does not qualify for any cost assistance from the government, unlike marketplace insurance plans. That is why it’s important to check your eligibility for a financial subsidy on the marketplace exchange before purchasing a short term medical plan.

Can I renew my short term health insurance plan?

Depending on your state of residence, you can re-apply for a new short term health insurance plan once your coverage expires for up to three years. Once you re-apply and are accepted for coverage for a second time, you are on a new insurance policy, and your deductible, coinsurance and copay amounts start over at zero.

What are the advantages of having short term medical?

There are many reasons why short term health insurance is a great alternative option!

  • There is no waiting period. Once your application is accepted and payment made, coverage can begin in 24-hours.
  • Short term medical is a great option for people who just need to bridge a gap in coverage between jobs or different life situations.
  • No networks to worry about – see any doctor you wish – or enroll in a traditional PPO network plan. The freedom and choice are yours.
  • Child-only applications are available beginning at age 6 months.
  • Prescription drug benefits available with some plans.
  • Only five simple medical questions to answer with immediate acceptance.
  • Easy online portal to manage your insurance documents and medical ID card
  • Did we mention its affordable?

How long does it take to apply for a policy?

You can apply for a short term health insurance plan in 5 minutes or less once you have compared your plan options.

So what does short term health insurance cover?

Depending on the level of medical coverage you purchase, you have access to many of the same services covered by a more expensive individual health insurance plan:

  • Doctor office visits
  • Emergency services
  • Hospitalization
  • Ambulance tPhysicalion
  • Physicial therapy
  • Prescription druPhysicale

Is there anything else I should know about short term health insurance?

  • You cannot have a pre-existing condition
  • You can’t be over 65 years of age
  • Short term medical insurance is meant as a temporary solution when uninsured

How much is the tax penalty for not having an individual health insurance plan?

As of January 1, 2019, there is no longer a penalty for not having an individual medical insurance policy through a private insurance company or the health insurance exchanges.

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