Short Term health insurance (or Term Health Insurance) is medical insurance designed to provide coverage during the gaps between other health care plans. Many people will find that a Short-Term health insurance plan is a more affordable and flexible solution to their health care needs than an Affordable Care Act (Obamacare) plan.
Because Short Term health insurance plans do not meet the requirements set by the Affordable Care Act, you will still be responsible for paying the tax penalty called the “Shared Responsibility Tax.”
Part of the Affordable Care Act dictates rules for non-ACA plans. As a result, Short Term plans cannot be automatically renewed, and you will need to submit a new application.
Like medical insurance before the ACA, Short Term plans can deny your application based on your current and past health conditions. Insurers will often probe up to 2 years of your health history.
The Affordable Care Act established a very clear set of minimum coverage benefits called the “Ten Essential health benefits.” Since Short Term plans are not trying to be Obamacare plans, they will not necessarily fulfill these benefits.
Despite these downsides there are good reasons why a Short-Term health plan might still be the right choice.
Short Term health insurance isn’t for everyone. People with certain chronic conditions or poor health might find that Short Term health plans lack the necessary coverage benefits for their healthcare needs. Additionally, people who have had a significant health event or medical condition in the past two years may have a hard time finding a Short-Term health insurance plan that will accept them with their pre-existing condition.
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