Choosing between short term vs long term health insurance can significantly impact your wallet and coverage. Short-term health insurance plans provide medical coverage for limited periods, usually no longer than 12 months. These plans offer affordability with premiums as low as $38 a month for travelers under 30.
However, short-term plans don’t cover pre-existing conditions and require medical screening questions to apply. What is a short term plan exactly? It gives you limited coverage temporarily until you can move to a more permanent solution. Meanwhile, long-term plans offer comprehensive coverage but at higher costs—a family of four might pay about $265 per month.
When comparing short term health insurance vs long term options, consider your specific needs. Short-term care insurance typically covers a set duration from a few months to a year. Additionally, these policies can use medical underwriting to reject people with certain health conditions, which makes their cost much lower than regular insurance plans.
Is short term health insurance worth it? That depends on your situation. While long-term care can cost between $2,000 to $10,000 monthly (or $24,000 to $120,000 yearly), short-term care insurance generally has lower premiums. This guide will reveal the hidden costs and benefits of both options to help you make an informed decision about your health coverage.
The duration of your health insurance policy directly affects both coverage and cost. Understanding these timeframes helps you choose the right option for your situation.
Short term health insurance typically provides coverage for limited periods, ranging from 30 days to 12 months. Nevertheless, recent federal rules have changed these limits. For policies sold or issued after September 1, 2024, short-term plans are limited to a maximum initial term of three months with a total duration cap of four months. Before these changes, some plans offered coverage for up to 364 days with renewals extending to 36 months.
Long term health insurance plans are designed for extended coverage periods of one year or more. Unlike their temporary counterparts, these plans are annually renewable, allowing you to maintain the same coverage for many years. Long term care insurance specifically can provide benefits for periods ranging from one to five years. Previously, some insurers offered unlimited benefit periods, though this option has largely disappeared from the market.
Eligibility requirements differ substantially between plan types:
Short term plans: Available to healthy individuals under age 65. Applicants must complete a health questionnaire and typically won’t qualify with pre-existing conditions.
Long term plans: Often require a more rigorous underwriting process. Most federal employees, postal service employees, uniformed service members, and their qualified relatives can apply for federal long term care insurance when not suspended.
Short term health insurance functions as temporary coverage during transitional periods. Upon application approval, coverage can begin as soon as the next day. These plans trigger benefits for specific events like injuries or illnesses. Although not renewable in the traditional sense, some insurers allow re-application for another short-term plan, albeit with limitations on how many times you can reapply.
Coverage details often reveal the true value gap between short term vs long term health insurance plans.
Short term plans typically exclude pre-existing conditions entirely. These plans consider any condition diagnosed or treated within the past 2-5 years as pre-existing. Conversely, long term plans must cover pre-existing conditions, as required by the Affordable Care Act (ACA).
Most short terms health insurance excludes maternity care, prescription drugs, and mental health services. Furthermore, these plans often lack substance abuse treatment coverage. In contrast, long term ACA plans must include these as essential health benefits.
Long term care vs short term care shows stark differences in preventive services. ACA-compliant plans cover preventive care at 100% without cost-sharing, including vaccinations, screenings, and annual checkups. Short term plans rarely cover preventive care, focusing primarily on unexpected illnesses and injuries.
One area where short term plans excel is emergency care flexibility. These plans often provide coverage across state lines without network restrictions. Some short term plans also include emergency medical evacuation benefits—a feature particularly valuable for travelers or those between permanent coverage options.
When deciding if short term health insurance is worth it, consider your specific healthcare needs alongside these coverage differences.
The financial picture for health insurance reveals stark differences in cost structures between temporary and permanent options.
Short-term health insurance premiums range from $50 to $200 monthly, offering immediate savings compared to long-term plans costing between $100 and $500 monthly. For travelers under 30, short-term coverage can start as low as $38 per month, whereas ACA-compliant plans average $380-$510 monthly depending on metal tier.
Short-term plans typically offer daily rates, allowing you to purchase coverage for exact periods needed. Consequently, long-term plans provide more payment flexibility with monthly, quarterly, semi-annual, or annual payment options. First, consider that annual payments often include discounts from insurers. Second, monthly payments improve cash flow management but may include additional fees.
Beyond premiums, consider these crucial cost factors:
Deductibles: Short-term plans average $10,000 compared to ACA plans’ $7,000
Out-of-pocket maximums: Short-term plans can reach $20,000 versus ACA’s $9,200 cap
Balance billing risks: Without provider networks, you might face unexpected charges
Indeed, short-term policies provide financial protection for those unable to afford comprehensive coverage. Given these points, they work best for healthy individuals needing basic, emergency-focused coverage.
Behind the advertised benefits of health insurance plans lie important limitations that affect their practical utility. Knowing these restrictions helps avoid unexpected coverage gaps.
Short-term health insurance policies are notably non-renewable in the traditional sense. For policies sold or issued after September 1, 2024, federal rules limit short-term plans to an initial term of three months with a maximum total duration of four months, including renewals. Previously, some plans could last up to 364 days with renewals extending to 36 months. Essentially, when your short-term policy ends, you must apply for a new one, and approval isn’t guaranteed if your health changes.
Short-term plans are unavailable in 14 states and DC as of 2024:
California
Colorado
Connecticut
Hawaii
Illinois
Maine
Massachusetts
Minnesota
New Jersey
New Mexico
New York
Rhode Island
Vermont
Washington
District of Columbia
Several states ban these plans outright, whereas others have regulations strict enough that insurers choose not to offer them.
Short-term policies generally include waiting periods for certain benefits. Maternity coverage, when available, often requires waiting periods ranging from 9 months to 2 years. Additionally, termination of a short-term plan doesn’t qualify you for a special enrollment period for ACA-compliant plans, potentially creating coverage gaps.
Simultaneously using both plan types can be beneficial. Since long-term policies typically have waiting periods of 60-90 days before benefits activate, a short-term policy can cover costs during this interim period. This approach provides continuous protection rather than leaving you vulnerable during transition periods.
Feature | Short Term Health Insurance | Long Term Health Insurance |
Duration | 30 days to 12 months (3-4 months max after Sept 2024) | 1 year or more, annually renewable |
Monthly Premium Cost | $50-$200 (as low as $38 for under 30) | $100-$500 (avg. $380-$510) |
Average Deductible | $10,000 | $7,000 |
Out-of-Pocket Maximum | Up to $20,000 | $9,200 cap |
Eligibility | – Healthy individuals under 65 | – More rigorous underwriting process |
Coverage Start | As soon as next day | Not mentioned |
Pre-existing Conditions | Not covered | Covered (ACA requirement) |
Preventive Care | Rarely covered | 100% covered without cost-sharing |
Maternity/Mental Health | Usually not covered | Covered as essential benefits |
Emergency Care | Flexible coverage across state lines | Network restrictions may apply |
Renewability | Not renewable (must reapply) | Annually renewable |
State Availability | Not available in 14 states and DC | Available nationwide |
Payment Options | Daily rates available | Monthly, quarterly, semi-annual, or annual |
Choosing between short-term and long-term health insurance requires careful consideration of your specific needs. Short-term plans offer lower monthly premiums starting at $38 for younger individuals. However, these plans come with significant limitations including higher deductibles averaging $10,000 and out-of-pocket maximums reaching $20,000. Additionally, they exclude pre-existing conditions, maternity care, and mental health services.
Conversely, long-term plans provide comprehensive coverage with lower deductibles around $7,000 and capped out-of-pocket maximums at $9,200. These plans must cover pre-existing conditions and essential health benefits as required by the ACA. Though more expensive with monthly premiums between $100-$500, they offer greater security through renewable coverage.
Recent federal regulations have further limited short-term plans to a maximum initial term of three months with a total duration cap of four months for policies issued after September 2024. Previously, some plans offered coverage for up to 364 days with renewals extending to 36 months. Therefore, these plans now serve primarily as stopgap coverage during transitions.
State availability presents another key consideration, as short-term plans remain unavailable in 14 states and DC. Meanwhile, long-term insurance can be purchased nationwide with various payment options including monthly, quarterly, and annual installments.
Ultimately, short-term health insurance works best for healthy individuals under 65 needing temporary coverage during life transitions. Long-term plans suit those seeking comprehensive, continuous healthcare protection despite higher costs. Your health needs, budget constraints, and location will determine which option provides the most value for your circumstances.
Understanding the true costs and limitations of short-term versus long-term health insurance can save you thousands in unexpected medical expenses and coverage gaps.
The hidden costs in short-term insurance often outweigh the premium savings, especially when factoring in coverage exclusions and higher cost-sharing. Choose short-term only for brief transitions if you’re healthy and under 65, but prioritize long-term coverage for comprehensive protection and financial security.
Q1. What are the main disadvantages of short-term health insurance? Short-term health insurance has several limitations. It typically doesn’t cover pre-existing conditions, requires medical underwriting, and may not provide coverage if your health situation changes. Additionally, these plans often have high deductibles and out-of-pocket maximums, and exclude essential benefits like maternity care and mental health services.
Q2. How do the costs of short-term and long-term health insurance compare? Short-term health insurance generally has lower monthly premiums, ranging from $50 to $200, while long-term plans cost between $100 and $500 per month. However, short-term plans often have higher deductibles (averaging $10,000) and out-of-pocket maximums (up to $20,000) compared to long-term plans, which have lower deductibles (around $7,000) and capped out-of-pocket maximums ($9,200).
Q3. Are short-term health insurance plans available in all states? No, short-term health insurance plans are not available in all states. As of 2024, these plans are unavailable in 14 states and the District of Columbia due to state regulations or bans. Long-term health insurance plans, on the other hand, are available nationwide.
Q4. How long can I keep a short-term health insurance plan? Recent federal regulations have limited short-term health insurance plans. For policies issued after September 2024, the maximum initial term is three months, with a total duration cap of four months, including renewals. This is a significant change from previous rules that allowed some plans to offer coverage for up to 364 days with renewals extending to 36 months.
Q5. Who is best suited for short-term health insurance? Short-term health insurance is best suited for healthy individuals under 65 who need temporary coverage during life transitions. It’s ideal for those who are between jobs, waiting for other coverage to begin, or recent college graduates. However, it’s important to note that these plans are not suitable for those with pre-existing conditions or those seeking comprehensive, long-term healthcare protection.