What is Short Term Medical Insurance?

What Is Short Term Medical Insurance – Overview

Short-term medical insurance is a type of health insurance policy offering temporary coverage. This coverage normally extends for a few months and up to a year. The Affordable Care Act (ACA) does not regulate this health insurance policy.

Consequently, these insurance plans do not necessarily have to offer minimum essential health benefits, as required by the ACA, such as inpatient and outpatient care, mental health care, and coverage for prescription drugs.

Short-term medical insurance plans don’t necessarily offer coverage for pre-existing health conditions. These insurance plans are meant for healthy individuals and usually limit how much they will pay for certain healthcare services or a total reimbursement amount.

More about Short Term Medical Insurance

As of my last update, federal guidelines allow short-term medical insurance plans to have initial terms of up to 364 days, with the possibility of extension or renewal for up to 36 months total, subject to state regulations, which may impose stricter limits. However, some states have even stricter restrictions regarding coverage duration. You can choose to sign up for short-term insurance at any time of the year and do not necessarily have to do it once a year as required for insurance plans bought through the marketplace.

Short-term medical insurance is best suited for the following:

  • Previously uninsured
  • Transitioning between jobs
  • Waiting for employer-sponsored insurance coverage
  • Transitioning out of a welfare program
  • Young adults leaving their parents’ insurance plan
  • Recent college graduates
  • Those who have missed the open enrollment period
  • Veterans transitioning out of the military
  • Retirees who are not yet eligible for Medicare coverage

Eligibility for Short Term Medical Insurance

Individuals who can pass an insurance provider’s medical underwriting rules can buy a short-term medical insurance policy. This usually means those under 65 years of age and in significantly good health.

Underwriting is a term used to define how an insurance provider determines your health status, whether you are eligible for insurance coverage, the price of coverage, and exclusions in the plan.

As of my last update, short-term medical insurance is unavailable or faces significant restrictions in several states due to local regulations that may prohibit or strictly limit their sale and terms. Specific states have enacted bans or stringent regulations on short-term plans, affecting their availability and the coverage options they can offer.

Residents of certain states, including but not limited to Colorado, Connecticut, Hawaii, California, New Jersey, Massachusetts, Maine, Rhode Island, New Mexico, New York, and Vermont, may find that short-term medical insurance plans are not available due to state-level bans or restrictions.

How to Qualify for Short Term Medical Insurance?

There are no strict mandates or regulations governing the purchase of short-term medical insurance. You can simply select a plan, sign up, and pay for coverage.

Most short-term medical insurance policies use very limited medical underwriting for applications. These policies usually have a bunch of Yes/No questions about specific medical conditions and offer coverage to anyone who can answer “no” to all the questions.

In addition, “post-claims underwriting” lets the insurance provider examine your medical records. This helps to determine that your present health problems are not a result of pre-existing health conditions when you file a new claim. If this is the case, the insurance provider can reject the claim and even rescind your insurance policy.

Cost of Short Term Medical Insurance

What Is Short Term Medical Insurance

What Is Short Term Medical Insurance – Cost of Short Term Medical Insurance

Short-term medical insurance plans often have lower premiums than standard, ACA-compliant health insurance plans, reflecting their more limited coverage and exclusions. On average, they cost as much as 50% to 80% less than conventional market-based insurance plans. However, as with any other type of insurance, short-term medical insurance costs vary according to different factors.

For instance, the cost of medical insurance will vary based on your age, location and the level of coverage you wish to have. Any short-term medical insurance plan with extensive coverage will cost more. The cost of short-term medical insurance can vary widely based on coverage levels, deductibles, and the insured’s age and location, and while some plans may have low starting premiums, costs can increase based on these factors.

The excellent affordability provided by short-term medical insurance plans is one of the main reasons for their growing popularity.

Coverage of Short Term Medical Insurance

Short-term medical insurance policies normally cover the cost of unexpected medical needs, including hospitalization and surgical treatments. However, it is important to know that these are usually basic plans with restricted maximum benefit limitations. You should also read the fine print carefully and learn about the extent of coverage before paying for any short-term medical insurance policy.


Short-term insurance plans may serve as a temporary solution for individuals in transition or without access to ACA-compliant plans. However, they should be aware of the limited coverage and exclusions compared to marketplace plans. The reasons for this can vary and usually relate to a significant change in life, such as losing a job or transitioning between two jobs.

Hence, it may be possible that you might not always have to buy short-term medical insurance. However, if you decide to buy short-term insurance, you must consider the provider network, the deductible, and the extent of coverage.

See Also

Short Term vs Long Term Disability

Is Long Term Disability Taxable?

Signs That You Will Be Approved for Disability

What is Short Term Disability

How to Get Cheap Medical Insurance?

Follow us