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

Short-term health insurance plans offer lower premiums than ACA-compliant plans and are available outside open enrollment periods. They also cover significantly less. Understanding the gaps is essential before relying on one.

What short-term plans are not required to cover

Short-term plans are exempt from ACA requirements. They are not required to cover the ten essential health benefits that ACA plans must cover. This means they can legally exclude maternity care, mental health and substance use disorder treatment, prescription drugs, rehabilitative services, and preventive care.

They can impose annual and lifetime dollar limits, which ACA plans cannot. They can deny coverage based on pre-existing conditions. They can exclude any specific condition or service in their policy terms.

Common exclusions

Most short-term plans exclude pre-existing conditions entirely for the duration of the policy. Any condition you had before the policy started, including conditions you may not have known about, can be excluded.

Mental health care, substance use treatment, and prescription drugs are commonly excluded or severely limited. Maternity care is almost universally excluded or available only as an expensive add-on.

Preventive care is typically not covered or counts toward your deductible. Annual wellness visits, screenings, and vaccinations that ACA plans must cover at no cost are often not covered.

When short-term plans might make sense

Short-term plans are designed for specific gap situations. If you are between jobs for a few months and in good health with no ongoing medical needs, a short-term plan provides basic protection against catastrophic unexpected illness or injury at lower cost than COBRA.

They are not appropriate for people with ongoing medical conditions, anyone who takes prescription medications, anyone planning a pregnancy, or anyone who needs mental health or substance use treatment.

The risks

If you develop a serious condition while on a short-term plan, you may find that the condition becomes a pre-existing condition that future plans exclude. Coverage may end before you have completed treatment because short-term plans have maximum durations, often three to six months, though some states allow longer periods.

Always read the policy documents carefully before purchasing. Marketing materials emphasize low premiums. The fine print contains the exclusions that determine what is actually covered when you need care.

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Bill Advantage is a document literacy tool. Nothing in this article constitutes legal or medical advice.