There are a number of reasons why you’d want to purchase health insurance for one month. But is it even possible?
In short, yes – it’s known as short-term health insurance or temporary health insurance. These plans provide coverage for the term you need, which can be for one month or a few months. Some decide to use this option as a way to cover themselves and their families during health insurance coverage gaps. It is also beneficial when traveling to an area outside of your existing network of providers.
Aside from this, you’ll find that there are some good reasons and great benefits by enrolling in short-term health plans. Let’s first review what to expect with short-term coverage.
What is Short-Term Health Insurance?
If you’re looking to buy health insurance for a month, then you should shop around for short-term health coverage. This is available on a temporary basis, for whichever length of time you choose. Most people buy temporary health coverage to protect against major illnesses and accidents that could occur while away on vacation or experiencing a coverage gap (if you are between jobs and have employer sponsored insurance, for example). So in a sense, it’s to provide coverage in the event of a catastrophe.
Short-term coverage is quite different from a traditional comprehensive coverage plan. These plans don’t offer preventive care, immunizations, physicals, vision care or dental care. Other factors you should consider before buying a short-term health insurance plan include:
- Temporary insurance is non-renewable, so once it ends you have to buy it all over again
- Pre-existing conditions don’t have to be covered and you can even be denied coverage due to a known medical issue
- If you don’t disclose your pre-existing health condition, you can be denied payment or dropped altogether when you become sick
- You can be denied for reasons other than your health
- Temporary plans don’t have the protections offered through Obamacare
In a sense, temporary health plans are fairly similar to many plans that existed before the Affordable Care Act was enacted.
How Long Can You Keep Temporary Coverage?
There are different terms available for temporary health insurance plans. You have the option of choosing a plan that’s one month or as long as a year. If you end up getting a plan that ends during open enrollment, your insurer may roll your plan over into a policy that offers minimum essential coverage. If this is the case, make sure that the end of your temporary health insurance plan coincides with open enrollment.
Do Any Short-Term Insurance Plans Have Minimum Essential Coverage?
There are no temporary health insurance plans in compliance with the Affordable Care Act (ACA, or Obamacare) since they do not offer minimum essential coverage or provide the required patient protections mandated by the ACA. So if you carry this type of policy, then you will still need additional comprehensive coverage throughout the year. Because Obamacare does allow for a three-month coverage gap you will need to enroll in a traditional plan for at least nine months of the year to be exempt from the ACA individual mandate tax penalty.
Now, this doesn’t mean short-term health coverage isn’t valuable. In fact, it’s an inexpensive option that can be very useful in certain circumstances. For instance, you can be exempt from the penalty if your income is low enough, allowing you to keep this low-cost catastrophic coverage for the full year. It can also be a beneficial option for individuals who are in a health coverage gap or who missed open enrollment.
Just remember, it’s a temporary solution, so don’t try to use it in place of an Obamacare-compliant insurance policy.
Buying Health Coverage Outside of Open Enrollment
Before Obamacare came along, you were able to purchase most private, non-employer sponsored health insurance plans whenever you wanted to. These were available directly through individual and family health insurance companies.
Since the Affordable Care Act was implemented, any plans purchased in the ACA marketplace are limited by specific enrollment periods, which consist of deadlines for individuals and families to enroll in an insurance plan. Once the enrollment period passes, the health insurance marketplace closes and you cannot change your plan until it reopens the following year. The marketplace offers cost-effective plans and some even come with subsidies, which are available to those who qualify.
Short-term health coverage can be purchased at any other time. Since these plans are not ACA-approved, so to speak, they are not included in the Obamacare marketplace and do not have specific enrollment periods; there is no deadline for these plans.
When to Buy Short-Term Health Insurance
There are many different reasons why individuals and families may want to purchase temporary health coverage. Here are a few examples of when you might find yourself in need of a short-term plan:
- You lost your term health insurance and the 60-day window is soon to pass. Once this window passes, you can’t buy a plan from the marketplace. After the 3rd month, the penalty will begin accumulating until you get coverage that includes minimum essential benefits.
- The health plan you had all year ends in November and will be renewed in January, so you buy short-term coverage for that gap. Since it’s only two months, you won’t have to worry about the penalty. Getting another term plan for that time period wouldn’t be cost-effective.
- You’re planning to travel out-of-state, but your HMO only has a local network. Short-term health insurance can be used to cover you during your travels.
- You resigned from one job but your new employer-based insurance coverage has a 30-day wait period before you qualify.
- You recently graduated from college and are not on your parent’s insurance plan. In an effort to save money you may select a short-term insurance policy with the expectation that you will soon find full time employment.
- Your work is mostly temporary or seasonal and you find yourself without insurance coverage for a few months at a time.
- You are experiencing temporary disruption in your employer-based coverage due to a strike or unexpectedly lose coverage after a lay off or termination.
- You turn 26 and are no longer eligible to remain on your parent’s health insurance policy.
If you’re planning to buy short-term health coverage, you can witness the following benefits:
- Affordable premiums
- Quick approval (sometimes the next day)
- Option of choosing between one month or a year of coverage
- Ability to fill in coverage gaps