Why Short-Term Health Insurance Might Not Be the Best Solution

1. Limited Coverage

Short-term health insurance typically offers very basic coverage and often excludes essential health benefits. These plans are not required to adhere to the Affordable Care Act (ACA) standards, which means they may not cover services like:

• Maternity care
• Mental health services
• Prescription drugs
• Preventive care
• Substance abuse treatment

If you need care that’s not covered under a short-term plan, you may end up paying for these services out-of-pocket, which could significantly increase your healthcare expenses.

2. Pre-existing Conditions May Not Be Covered

One of the major drawbacks of short-term health insurance is that these plans often exclude coverage for pre-existing conditions. If you have a medical condition that existed before the policy was purchased, the insurer may deny coverage for any related treatments or medications.

This is a stark contrast to ACA-compliant plans, which are required to cover pre-existing conditions. For individuals with chronic illnesses like diabetes, heart disease, or asthma, short-term plans may leave you without the necessary coverage to manage your health.

3. Temporary Nature

As the name suggests, short-term health insurance is only intended for temporary use, typically offering coverage for 3 to 12 months, with some policies extending up to 36 months. If you anticipate needing coverage beyond that time frame, you may find yourself without insurance once the plan expires. Additionally, there’s no guarantee you’ll be able to renew your plan, and some states limit how long you can stay on short-term plans.

If you’re relying on this coverage long-term, you could face gaps in your insurance that leave you vulnerable to unexpected medical costs.

4. High Out-of-Pocket Costs

While the premiums for short-term health insurance plans are often lower than traditional plans, the out-of-pocket costs can be much higher. These plans tend to have:

• Higher deductibles
• Lower coverage limits
• Limited benefits

This means you may be responsible for a larger portion of your medical bills before the insurance kicks in. For individuals who need regular medical care or experience an unexpected illness or injury, this can result in substantial financial burdens.

5. No Coverage for Preventive Care

Preventive care, such as routine checkups, vaccinations, screenings, and wellness visits, is typically not covered by short-term health insurance plans. In contrast, ACA-compliant plans are required to cover preventive services at no additional cost to the policyholder.

Skipping preventive care could lead to more serious and costly health problems in the future, as early detection and treatment are key in managing many health conditions.

6. Limited Networks

Short-term plans often have restricted provider networks, meaning you may have fewer options when choosing doctors, hospitals, or specialists. If you go outside the network, your out-of-pocket costs could skyrocket, or your care may not be covered at all.

This limitation can be particularly problematic if you have established relationships with healthcare providers or need access to specialists for ongoing treatment.

7. No Guarantee of Renewal

Once your short-term health insurance plan expires, the insurer is not obligated to renew your coverage. If your health status changes during the policy period—such as developing a serious illness—you may find yourself unable to purchase another short-term plan or be subject to even higher premiums due to the new health conditions.

In contrast, ACA-compliant health plans offer guaranteed renewability, meaning your insurer cannot deny you coverage based on changes in your health status.

8. Potential for Denied Claims

Because short-term health plans are not subject to ACA regulations, insurers have greater flexibility to deny claims for services they deem unnecessary or outside the scope of the policy. This can leave you with unexpected bills even for treatments you assumed were covered.

9. Exclusion of Essential Health Benefits

Under the ACA, health insurance plans are required to cover a set of essential health benefits, including hospitalization, emergency services, and prescription drugs. Short-term health insurance plans are not required to include these essential benefits, and many exclude them altogether.

This means that if you require hospitalization or surgery, you may be left with significant medical bills. For individuals looking for comprehensive healthcare coverage, short-term plans fall short.

10. Lack of Consumer Protections

Short-term plans do not have the same consumer protections as ACA-compliant plans, which can put policyholders at risk. For example:

• No guaranteed coverage: Insurers can deny coverage based on medical history.
• Lack of transparency: Policies may be difficult to understand, and some insurers may not fully disclose all exclusions and limitations.
• No out-of-pocket maximums: ACA-compliant plans have limits on how much you pay out-of-pocket for covered services, but short-term plans do not always have these caps.

11. Not Eligible for ACA Subsidies

If you purchase a short-term health insurance plan, you are not eligible for premium subsidies that can make ACA-compliant plans more affordable. Depending on your income, you may qualify for financial assistance through the ACA marketplace, which could make a traditional health insurance plan a better and more affordable option than a short-term plan.