Short-term health insurance, also known as STM or term health insurance, provides medical insurance coverage for plan participants for anywhere from 30 to 364 days, depending upon the state. It is intended to provide protection during gaps in medical insurance coverage, such as when changing jobs or moving from a group to an individual policy. As the name suggests, STM is designed to be temporary and should not be considered a replacement for other, more long-term insurance coverage.
Like other policies you may be familiar with, temporary STM plans are subject to deductibles, coinsurance, and copays. One caveat to note is that these plans are not subject to the Affordable Care Act minimum requirements, so they do not provide all the same coverage. They are typically more affordable but come at the cost of including commonly covered conditions like maternity care or preexisting conditions.
There are many reasons people may choose to seek out a temporary health insurance policy. Though there could be other specific needs, most seek STM coverage for common situations such as:
Any time you request a term medical insurance policy, you'll have to complete a questionnaire on your current health and prior history. If you have any preexisting conditions, you may be denied temporary coverage completely. Other reasons for disqualification could include but aren't limited to:
The most obvious answer is that temporary insurance is better than no insurance at all. However, term medical plans have many other benefits, including:
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The details of the coverage will depend upon the policy you choose. As a general rule, most plans will cover emergency room visits, some doctor's appointments, and some prescriptions. As stated above, these plans are not subject to the protections of ACA plans, leaving many treatments not covered. The most common exclusions are preexisting conditions, mental health needs, or maternity care, though there could be more.
It is also important to understand the coverage, limitations, and restrictions of your STM plan. They may require a waiting period before covering some treatments and may also limit whether you can extend the plan at the end of the original period. Even if extending a current policy, you may have another waiting period for coverage on the extended policy period. Additionally, if you were covered for a condition during one policy, it could be considered a preexisting condition for the extension or another STM plan.
At Healthplans.com, we caution people against a couple of types of STM products: fixed indemnity plans and mini-med plans. We do not recommend them as they do not offer the same security as the STMs we've discussed, even though they may sound appealing initially.
A fixed indemnity plan attracts many people with the allure of no deductible and pre-stated, fixed amounts to be paid for covered events. However, the coverage is severely limited. If an event is not specifically listed, it isn't covered. It also doesn't cap your out-of-pocket for catastrophic events.
Mini-med plans can be appealing at first glance due to the low costs. Beware of the trade-off, though. They come with extremely high deductibles that may negate the reason for having coverage in the first place. In some cases, mini-med plans may be no more effective than having no insurance at all, except you've been paying premiums.
Temporary medical insurance can serve a necessary purpose as long as the buyer takes the time to understand the coverage, terms, and conditions of the plans they are considering. As you’ve already read, there are differences in the types of short-term products and coverage available. Some may be much more suitable for your needs than others. If you don’t currently have health insurance and are anticipating having workplace coverage or other health insurance coverage in the near future, an STM policy could be an excellent investment.
At Healthplans.com, we work with many of the nation’s most respected insurance providers. For instance, in Texas, we work with Humana One, Blue Cross Blue Shield of Texas, Aetna, United Health One, Scott & White Health Plan, Companion Life, and Celtic. The exact providers available to you may change depending upon your state and the type of coverage requested. We make it as easy as possible for you to narrow down your choices.
Regardless of where you search for your STM coverage, there are a few tips that can help you determine the right policy for your needs:
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