Short-term health insurance (STM) plans are meant to be used when you have a temporary gap in insurance coverage. Perhaps you lost a job, are no longer eligible for a group insurance plan, find the cost of COBRA plans too expensive, or are not eligible for special enrollment in an Affordable Care Act (ACA)-compliant plan and must wait until the next open enrollment period.
Many people turn to short-term health insurance because they think it’s a less expensive option than an ACA marketplace plan. The problem with STM plans is their many restrictions and exclusions; they may not cover essential benefits, or they have restrictive maximum limits, high co-pays or deductibles, or no coverage for pre-existing conditions. With so many restrictions and differences among plans, it’s important to be cautious when you buy an STM policy. Be sure you understand what is covered, what is not, and for how long the plan will cover you.
We reviewed STM plans for a dozen of the largest health insurers in the U.S. to find the ones with the best options. You can decide if an STM policy is right for you, and which one best fits your particular needs.
The 5 Best Short-Term Health Insurance Providers of 2020
Best Overall: Everest
Does not confine you to a network
Low copay and coinsurance options
Home health care, physical therapy, mental health, and substance abuse benefits
Prescriptions are not covered
Pre-existing conditions are not covered
Some states require membership to Med-Sense Guaranteed Association (MSGA)
Available in a limited number of states
Everest has been underwriting insurance since 1973. The company has a Moody’s insurance financial strength rating of A1 with various policy types on the market, including property, casualty, specialty, and accident and health insurance. They offer policies in 25 states across the country.
Regarding Everest's short-term health insurance plans, the prices ranged from $106 per month up to $191 per month when we quoted a 27-year-old female, non-smoker in good health. These quotes included a wellness benefit to take care of preventative medicine.
Other features of Everest STM include:
- Deductibles of $1,000, $2,500, $5,000, $7,500, or $10,000
- Out-of-pocket maximums of $2,000, $3,000, or up to $4,000
- Maximum coverage benefits from $250,000 to $1,500,000
- Coinsurance options are 50/50, 70/30, 80/20, or 100/0 with copays of $30, $40, or $50
When you get approved, emergency coverage begins the next day, and there's a five-day waiting period for the routine wellness benefit. There is a 30-day waiting period for cancer benefits (cancer must be newly diagnosed 30 days after plan start date), and a six-month waiting period for certain other covered services, such as tonsillectomy, herniorrhaphy, and more. Although Everest does not offer coverage for prescriptions, it does provide discount cards.
Why We Chose It: We chose Everest as best overall for its low deductibles, reasonable prices, and having the most dynamic doctor visit coverage that includes wellness visits, emergency care, and mental disorder care.
Best for Customized Coverage: IHC Health Group
Some plans include routine check-ups
X-rays and some other diagnostic exams included
Option of using your own doctor in- or out-of-network
Lifetime maximums up to $2,000,000
Pre-existing conditions covered on some plans up to $25,000
Sport-related injuries not covered
Highly customizable plans may exclude many coverages
Some plans have high deductibles before you can access coverage
May be required to join Communicating for America (CA)
The IHC Group is an organization of insurance carriers operating in 23 states and including member insurers such as Standard Security Life, Madison National, and Independence American Insurance Company. Your policy will be serviced by one of these companies depending upon where you live, and some states require membership in Communicating for America, a national non-profit organization whose mission is to promote health and wellbeing through member benefits. AM Best gives a Financial Strength Rating (FSR) of A- to the IHC Group and Standard Security Life. The IHC group offers plans in 19 to 35 states, depending on the plan.
We ran quotes for a 27-year-old healthy female, with no medical conditions, and received quotes ranging from $48 to $105 per month on a six-month plan, and $84 to $191 on a 364-day plan. We also quoted a 35-year-old ($68 to $153 per month), a 45-year-old ($99 to $119 a month), and a 55-year-old ($168 to $202 per month) on the six-month plans. Coverage can begin within 24 hours of applying.
Exploring a range of policies from IHC Group carriers, deductible options generally included $2,500, $5,000, and $10,000. The coinsurance options we found were 50%, 70%, and 80% with out-of-pocket maximums between $4,000 and $10,000. Plans vary by state, though, and we did find outliers; for example, we saw plans with $1,000 deductibles and coinsurance maximum limits from $10,000 to $20,000.
Additional coverage for supplemental dental or hospital insurance can be added to plans, and IHC members also offer prescription discount plans and telemedicine consultation options.
Common exclusions include pre-existing conditions, including anything treated or consulted upon within five years before coverage became effective. Exclusions are different by state and issuing provider. For example, the Independence American Insurance Company policy we reviewed did not pay benefits for chiropractic care, mental health treatment, or periodic health exams, but did include an option to cover $25,000 for pre-existing conditions such as known illnesses or injuries in the Connect Plus Plan.
Why We Chose It: The IHC Group offers low- to high-deductible options and the ability to add pre-existing condition coverage, making it the most customizable plan provider that we reviewed. You'll also find other supplemental health options like telemedicine and prescription discount plans that improve the standard offerings and allow consumers to pick what is most important to them.
Best for Longest Policy Options: UnitedHealthcare
Up to three-year policy available
$5,000 prescription coverage available
Preventative care wellness checks covered
Some pre-existing conditions may be covered after 12 months
Only available in 19 states
Issue ages 19 to 63
No coverage out-of-network
Some plans require you join FACT
UnitedHealthcare underwrites its policies through Golden Rule Insurance Company, a part of UnitedHealthcare since 2003. The company has been selling short-term health insurance for over 30 years, and policies are available in 19 states. UnitedHealthcare has a Moody’s insurer financial strength rating of A1.
Policy pricing starts at $24 a month for a 27-year-old non-smoking female and ranges up to $178 per month; at 35 years old it was $112 to $236 per month, and at 45 years old it was $142 to $378 a month. In some states, you must join the Federation of American Consumers and Travelers (FACT) and there will be an additional charge of $4 per month as a result. FACT is a consumer organization that provides savings to members on 20 different benefits and coverages. The length of policies varies from one month to 12 months with options to renew up to 36 months on the TriTerm Medical plan.
There are STM plans that cover 100% of medical costs after you meet the deductible, or options with 20%, 30%, or 40% copays until you reach the annual maximums. You can also customize if your plan needs to include prescription medication.
Maximum benefits range from $250,000 to $2,000,000 and are subject to exclusions, such as maternity care, accident-related events, emergency services, preventative care, hospitalization, pre-existing conditions, and prescription drugs. Coverage begins after you meet the deductible with options of $1,000, $2,500, $5,000, $10,000, or $12,500.
Waiting periods vary depending on the coverage in the plan. Coverage for illness begins on the sixth day after the plan begins, and there is a six-month waiting period for preventive care benefits. Services related to eligible pre-existing conditions are only covered after 12 months.
Why We Chose It: UnitedHealthcare was our top choice for the longest policy options because it is the only provider with up-to-36-month coverage where allowable by state law.
Best for Mental Health and Wellbeing: LifeShield
Offers mental healthcare coverage
Offers substance abuse coverage
Offers preventative and wellness coverage
You may choose to be treated in-network or out-of-network
No coverage for outpatient lab services
No coverage for x-rays
No prescription coverage
Limited information on the website
LifeShield National Insurance Co. has been in business since 1982 and offers group and individual health insurance nationwide. LifeShield has an AM Best Financial Strength Rating of B++ (Good).
LifeShield has two plans, with deductible options of $1,000, $2,500, and $5,000. The coverage period maximums range from $750,000 to $1,000,000. There are 80/20 or 100/0 coinsurance options with out-of-pocket maximums from $2,000 to $4,000. LifeShield policies include exclusions and limitations on emergency rooms, hospital stays, and surgery benefits, among many other things.
Plan coverage provides for mental health professional visits that include counseling, psychiatric treatment, and mental illness diagnostics. There is also coverage for the treatment of alcohol and drug abuse except in the states of Georgia and South Dakota.
You can obtain a LifeShield STM policy fairly quickly thanks to the company's next day policy issuance. There is a five-day waiting period for sickness and a 30-day waiting period for cancer.
Why We Chose It: LifeShield provides the most robust options for mental health coverage with some substance abuse coverage along with plans that cover preventative care.
Best Value: Pivot Health
No network (all doctors accessible)
Access to 24/7 telemedicine
Very low maximums on the cheapest plans
Requires emergency pre-certification within 48 hours
Pivot Health has been around since 2016, managing over $7 billion in insurance premiums, and is affiliated with Communicating for America, a consumer advocacy group in favor of affordable healthcare for Americans. Pivot Health underwrites its short-term health plans through Companion Life Insurance Company, which has an AM Best financial stability rating of A+ (Superior). Pivot Health is available in 27 states.
Pivot Health has easy-to-use online tools that help you prioritize your insurance needs before it gives you quotes, and it offers you a selection of available features, as well, such as 70% off prescription drugs. You will also receive discounts up to 30% off of eye exams, frames, lenses, and contacts, making this company our stand-out for excellent STM value.
We got 51 plan options ranging from $62 to $269 per month for a 27-year-old. Almost half of the options were under $100. For a 35-year-old, the pricing was the same at $62 to $269 per month, and for a 45-year-old it was $89.69 to $411 per month. At age 55 it was $121 to $618 per month.
You can choose deductibles between $1,000 and $10,000, the maximum out-of-pocket cost is between $3,000 and $10,000, and the maximum annual limits range from $100,000 to $1,000,000. All plans have co-pays of 20% or 30%.
Examples of some of their common exclusions include pre-existing conditions, immunizations, routine physical exams, and injuries resulting from extreme sports. The waiting periods are five days for illness, 30 days for cancer, and six months for certain specified items like a tonsillectomy.
Why We Chose It: Pivot provides a vast selection of affordable basic coverages and valuable options so that you can get the right policy for the right price, with the ability to add numerous discounts for things like prescription drugs and vision care.
Who Is Eligible for Short-Term Health Insurance?
Short-term health insurance provides limited coverage as a temporary bridge while you wait to qualify for an ACA compliant plan. It can be used in circumstances where you do not yet qualify for a group insurance plan or you are waiting for the next open enrollment. Some people choose short-term health insurance as a temporary coverage in case of an emergency if they are suddenly without coverage for a variety of reasons, here are some examples:
- Leaving a job that had a health insurance plan and not qualifying for COBRA plans
- Retiring early and looking for temporary insurance until qualifying for Medicare
- No longer qualifying for a group plan due to divorce
- Moving to a new state where an existing plan cannot follow, and waiting until a new plan starts
- Students or young adults turning 26 who no longer qualify for their parent’s insurance
- People who want to have a plan with no network, and find ACA plans too expensive
Anyone can apply for short-term health insurance. However, because short-term health is not ACA compliant, it uses medical underwriting and may refuse to insure you (or offer only limited coverage). Depending on which state you are in, coverage may only be available for a very limited time for a maximum of three years.
How Can You Buy Short-Term Health Insurance?
Short-term health insurance is available through quotes you can obtain by phone or directly on the insurance company's website. Online marketplaces and insurance agencies also have websites that provide quotes with various insurers (in some cases hundreds), so it makes it easy to find options. Some examples include eHealth and Agile.
Short-term coverage has always been known as a lower-cost health insurance option, but with many changes to tax credits for lower-income individuals, it is important to consider all your options. Check if you qualify for a special enrollment period, and be sure and check what you can get in the ACA marketplace first. There are even some “free” (zero-premium) Bronze ACA plans available for low-income enrollees in parts of the country.
How Much Does Short-Term Health Insurance Cost?
The average cost of short-term health insurance is $124 a month compared to $393 for an unsubsidized ACA-compliant plan. We found plans with very limited coverage, or coverage more suited to the concept of catastrophic plans (due to their high deductibles), for as low as $60 a month. It can be a confusing process due to the lack of consistency in plan coverages, but it is recommended to shop and compare the options line by line.
What Does Short-Term Health Insurance Cover?
Short-term, limited-duration (STLD) health insurance, also known as short-term medical (STM), is meant to cover hospital room and board, emergency health situations, inpatient doctor visits, and other unexpected medical needs that are not part of pre-existing conditions. Unfortunately, confusion about how the coverage works and existing exclusions create a lot of claim denials. These are emergency plans with limitations for preventative care, high deductibles, which prevent you from being covered until the deductible has been met.
Short-term health providers will tailor different types of packages in varying price ranges. When purchasing short-term health, you can find some policies that offer more coverages than others. You do not need to settle for a bare minimum plan, just be sure and ask about preventive care add-ons or other coverage to get the best quotes. It is worth comparing a few options before you make a decision.
What Does Short-Term Health Insurance Exclude?
Short-term health plans have many exclusions, including no coverage for pre-existing conditions. Short-term health plans are not subject to the ACA provisions and are not ACA compliant. Short-term health plans leave you with significant risks of incurring medical debt due to high deductibles, extensive exclusions, and, because of this, potential denials of coverage.
Here are some examples of exclusions that demonstrate the limitations found in many short-term health plans:
- 43% do not cover mental health services
- 62% do not cover substance abuse
- 71% do not cover outpatient prescription drugs
- No short-term health plans cover maternity care
Short-term health plans do not cover wellness visits, although we found a few in our reviews that do offer it for a cost.
Short-Term Health Insurance vs. COBRA
COBRA plans allow you to maintain the coverage you had through your employer or previous group benefits, which include all the ACA-compliant essential benefits and allow you to maintain coverage for things like pregnancy or mental health if your former plan covered it. In contrast, STM plans will provide you with much less coverage, and no essential benefits.
The average cost of a COBRA plan will depend greatly on what kind of plan your employer or group had in the first place. In some cases, the employer may continue to pay into the plan for you, which will give you a reduced cost. In others, you may end up having to pay into the plan yourself fully. Don’t forget to consider that all amounts you already paid toward your deductible will count toward the COBRA continuation of benefits, and this can save you a lot of money, especially if you only plan to be on it for a short while.
Not having to pay the deductible again can sometimes justify the added monthly costs. These savings can be significant if you consider that the truly “cheap” healthcare options offered through short-term health plans exclude many coverages you may need, and often have very high deductibles before you can access the coverage.
How We Chose the Health Insurance Companies
We looked at short-term health insurance plans through insurance companies and independent health insurance marketplaces to discover what options exist. We investigated the waiting periods, qualifications, types of coverage available, common exclusions, maximum limits, deductibles, and copays across the different plans. Our goal was to highlight some of the best short-term health insurance options offered through reputable insurance companies to help you compare and decide if short-term health insurance is a good idea for you.
Communicating for America. "About Communicating for America." Accessed June 1, 2020.
FACT. "About FACT." Accessed June 1, 2020.
Kaiser Family Foundation. "ACA Open Enrollment: For Consumers Considering Short-Term Policies." Accessed June 1, 2020.
Healthinsurance.org. "Duration and renewals of 2020 short-term medical plans by state." Accessed June 1, 2020.
eHealth. "Customer Promise." Accessed June 1, 2020.
Kaiser Family Foundation. "How ACA Marketplace Premiums Are Changing by County in 2020." Accessed June 1, 2020.
CMS.gov. "Fact Sheet: Short-Term, Limited-Duration Insurance Proposed Rule." Accessed June 1, 2020.
ThinkAdvisor. "Average Short-Term Health Premium Creeps Lower." Accessed June 1, 2020.
U.S. Department of Labor. "An Employee's Guide to Health Benefits Under Cobra," Page 6. Accessed June 1, 2020.