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3 Situations Where Short-Term Health Insurance May Be a Good Idea

In Michigan, Short-Term Medical Insurance plans are limited to 185 days in duration, and renewal is prohibited.  Further, Short-Term plans do not provide coverage for treatment related to most pre-existing health conditions (e.g., diabetes, asthma, cancer, etc.).   To be sure, Short-Term plans are far more restrictive in terms of the care and services covered when compared to an Affordable Care Act (“ACA”) compliant / Major Medical plan.

According to research from the Kaiser Family Foundation:

  • 43% of short-term plans do not cover mental health solutions;
  • 63% do not cover substance abuse treatments;
  • 100% of surveyed plans do not cover maternity care; and
  • 71% do not cover outpatient prescription drugs.

Nevertheless, Individuals and families who fall-into one of the below scenarios may want to consider enrolling in a short-term medical insurance plan – rather than an ACA-compliant / Major Medical plan.

  • Individuals Stuck in an Employer Waiting Period.   Many employers have a 90-day waiting period before health insurance benefits begin.  A temporary Short-Term health plan may help “bridge the gap” for workers who are between jobs or stuck in a new employee waiting period.
  • “Aging off” Parents’ Health Insurance Plan.  Low-cost Short-Term health insurance may be a good option for individuals turning 27 who do not have access to employer-sponsored health coverage, or who simply need a more affordable option.
  • Early Retirees.  Those individuals retiring before they turn 65 – under most circumstances – do not yet qualify for Medicare, but many earn too much household income to qualify for an ACA subsidy.  Those “budget-conscious, not-quite-yet-senior-citizens” may find Short-Term health insurance to be a cost-effective alternative option to enrolling in a more costly ACA Compliant plan.