Short term medical plans are temporary insurance options, not long-term health insurance needs. The monthly premium cost may be lower because these plans do not offer as many benefits and are not subject to ACA requirements. For example, they provide less coverage, like comprehensive preventive care benefits. STM plans are designed to provide limited benefits to help with medical treatments resulting from unexpected illnesses and injuries.
Comparison of Short Term Health Insurance and Obamacare
(Example from the Nebraska Department of Insurance)
|
What They Offer |
Short Term Medical Plans |
ACA Major Medical Health Insurance (Obamacare) |
|
Coverage Type |
Temporary coverage. |
Long-term, minimum essential coverage that include the ACA’s 10 essential health benefits. |
|
Coverage Length |
For policies purchased before September 1, 2024, 30- to 364-day initial terms, with additional re-application for up to 36 months in total (duration limits vary by state). For policies purchased on or after September 1, 2024, ≤3 month initial terms, up to 4 month total duration. |
Consecutive 12-month coverage with guaranteed renewability each calendar year, barring special case scenarios. New premiums apply year to year. |
|
Pre-Existing Conditions |
Even if approved for a short term medical plan, preexisting conditions are not covered. |
Covered by law. ACA plans are guarantee issue, meaning you cannot be turned down for coverage and your preexisting conditions will be covered. |
|
Preventive Care Benefits |
Not typically covered with minimal exceptions. |
Covered by law. Preventive care is one of the required 10 essential health benefits in all ACA health plans. |
|
Enrollment Period |
Year-round enrollment. Plans can start as early as next day if medical underwriting is accepted on application. |
Limited to Annual Open Enrollment Period (or during a Special Enrollment Period with a qualifying life event). |
|
Subsidies Available |
No |
Yes, if enrolled on the Health Insurance Marketplace or state-specific ACA exchange. |
|
Guaranteed Issue |
No |
Yes |
Short term medical plans are temporary insurance options, not long-term health insurance needs. The monthly premium cost may be lower because these plans do not offer as many benefits and are not subject to ACA requirements. For example, they provide less coverage, like comprehensive preventive care benefits. STM plans are designed to provide limited benefits to help with medical treatments resulting from unexpected illnesses and injuries.