Short Term Medical Insurance

Short term medical insurance is an alternative to the marketplace.

Few people know about insurance polices known as Short Term Medical plans. They have a pretty interesting history and they actually can be good fits for the right situation. However, they are not a fit for everybody.

Short Term plans originally were created to cover an individual that needed insurance on a very short term basis (hence the name Short Term Medical). They usually cover a few months at a time, often in a situation like if someone was in-between jobs and had a gap of insurance for possibly a few months. For the longest time they were never looked at as anything more than that.

Over the years, they have started to be looked at as a viable long term insurance option for people who meet certain parameters and find themselves in certain situations. What we are seeing now is plans in some areas that will cover people for up to 2-3 years at a time and provide much more of a long term solution if work insurance isn't an option and a subsidy is not possible on the marketplace under the ACA (affordable care act). 

When are short term plans a good option?

When selecting Short Term Medical Insurance, it's important to keep in mind the following aspects: 

  • Why does this matter? It is actually quite simple. The higher the income, the less likely someone is to qualify for a premium subsidy under a Marketplace plan with the Affordable Care Act guidelines. In most areas, if you compare a marketplace plans monthly cost without assistance with that of a Short Term Medical Policy, it is usually more favorable on the Short Term policy. Marketplace plans without subsidy's can often times be rather expensive. If you qualify for a premium subsidy however and are not in a higher tax bracket, a marketplace plan would likely make more sense for you.

  • Why does this matter? Well, Short Term Medical plans do come with some kind of health questions and underwriting so it can affect your eligibility. On top of that, Short Term Medical plans also have more limitations on covering things such as pre-existing conditions, preventative care, and more. If you have lingering health concerns, you are likely going to be better off on a marketplace plan because they do not have these limitations and are not allowed to ask you health questions.