Short-term Health Insurance: Can it Replace a Health Insurance Policy?

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Currently, a short-term health plan can last one month and sometimes up to three years, depending on the plan, but are usually only as long as a year. Short-term health insurance plans provide temporary coverage during gaps in traditional health insurance, like if you're between jobs or waiting for your new policy to become active. 

A short-term health insurance policy is not a long-term solution. You’ll have limited or no prescription drug coverage, preventive care, maternity care and mental health services. Also, renewals are not guaranteed.

As President, Donald Trump extended the length of time that individuals could hold on to a short-term health insurance policy, but there’s a Biden bill pending, which would reduce that term to four months maximum.

The reason behind Biden’s attempt to restrict the active term is because short-term health insurance plans are not as comprehensive as traditional health insurance plans. They also do not have the same safeguards as Affordable Care Act (ACA) plans, especially the ban on exclusions based on existing conditions.

Let’s take a look at the difference between short-term health insurance policies and traditional plans and go deeper.

Key Takeaways

  • Short-term health insurance is not a substitute for traditional health insurance.
  • With high-deductibles and no coverage for existing conditions, short-term health insurance plans do not have to follow the Affordable Care Act’s guidelines.
  • Short-term health insurance policies are great for people waiting a short time before traditional coverage begins.

What Is Short-term Health Insurance?

A short-term health insurance policy is designed to cover sudden illness and emergency care. It is not as comprehensive as a traditional health plan. Short-term health plans can cover an individual for one month to a year, sometimes up to three years, but new laws may soon change the maximum duration to four months.

Short-term insurance policies are banned in these states:

  • California
  • New York
  • New Jersey
  • Rhode Island
  • Massachusetts

Short-term health insurance plans often have much lower monthly premiums at a fraction of the cost of a traditional plan, which is appealing, but they do not offer comprehensive benefits and have high deductibles, leaving you to pay for most of your health care costs.

The 10 Essential Coverages in Traditional Health Plans

A short-term insurance plan may offer some of these coverages but many of these services are not included. Traditional ACA health plans are required to offer all ten services:

  • Ambulance services
  • Emergency services
  • Preventative care visits
  • Hospitalization
  • Laboratory services
  • Maternity and newborn care
  • Mental health and substance use disorder services
  • Rehabilitation services
  • Pediatric services (including oral and vision)
  • Prescription drugs

Short-term health insurance plans often cost a fraction of the cost of a traditional plan–but with good reason.

Short-term Health Insurance Plans Vs. Traditional Health Insurance

As you can see in the table below, there are some advantages to a short-term health plan, like flexibility of enrollment periods, lower premiums and oftentimes, no network restriction or preferences, so you can see any doctor you want. However, coverage will be limited, you will pay more in out-of-pocket costs due to a high deductible and pre-existing medical conditions will prevent you from buying coverage. Most short-term health insurance plans have a questionnaire about your health when you apply. 


Short-Term Health Insurance

Traditional Health Insurance

Pre-existing Conditions



Preventative Care



Maternity Care



Mental Health






Network of Providers

Some plans do not restrict you to a network, some do.

Some plans restrict you to a network, some cover more if you stay within the network.

Tier System




Vary, but are often cheaper than traditional plans

Follow ACA limits










Vision and Dental


Excluded (except in certain cases)


Any time, no fees



Any time

Open Enrollment or Special Enrollment Periods only


Not always


Reasons To Buy a Short-term Health Insurance Plan

If you missed open enrollment for a traditional health plan, you can buy a short-term plan to cover the gap until next year. If you absolutely cannot afford a traditional plan, a short-term plan is often cheaper and can hold you over until you are able to buy a traditional plan. Recent immigrants, international students, early retirees waiting for Medicare eligibility and U.S. citizens returning to the United States after living abroad can benefit from a short-term health insurance plan.

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Short-term Health Insurance FAQs

When can I enroll in a short-term health insurance plan?

You can buy a short-term health plan for emergency coverage at any time.

When can I enroll in traditional health insurance?

The open enrollment period (OEP) usually starts in November each year. However, certain life events, like getting married, having a child, or losing other coverage, may trigger special enrollment periods (SEP), meaning you can buy a plan outside of the OEP.

Can I be eligible for subsidies for a short-term health insurance plan based on my income?

No, only traditional ACA plans are government regulated and can offer subsidies based on income.

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