Why Short Term Health Insurance Isn't The Best Option If You Lost Medicaid Coverage
The Gist
If you lose Medicaid coverage, you may be targeted to buy short-term health insurance.
Short-term health insurance should be avoided because it’s typically more costly, low-quality, and may not protect you if you have existing health problems.
You likely qualify for tax credits that lower the cost of higher-quality, long-term health coverage. Stride will help you find and enroll in the right plan for your needs.
In This Article
In Short
It’s possible that you could lose Medicaid coverage later this year, because states are in the process of reassessing people’s eligibility for the program. If you do lose Medicaid, you might consider buying short-term health insurance to cover any gaps in coverage. But buyer beware — short-term health insurance is often more costly and lower-quality than advertised, and it’s not a good option for new coverage. Instead, a new long-term plan is probably your best bet, as you likely qualify for tax credits that make high-quality plans much more affordable.
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If you get your health coverage through Medicaid, it’s possible that you could be losing Medicaid eligibility later this year. That’s because states are undergoing Medicaid determination, a process where they check to see if you still qualify for Medicaid or the Children’s Health Insurance Program (CHIP).
Redetermination (which is also referred to as renewal, unwinding, recertification, and case review) used to happen every year. But the government took a break from it during the pandemic to ensure everyone had continual access to health care. Because annual redetermination is restarting, your state might alert you that you’re no longer eligible for Medicaid, and you’ll have to find coverage elsewhere.
Don’t worry — Stride is here to help you prepare for these changes and weigh your options when it comes to new coverage. As Medicaid redetermination ramps up, you might see advertisements to enroll in short-term health insurance while you’re between long-term providers. But don’t be fooled: Short-term health insurance is usually low-quality and high-cost, so it’s best to avoid it.
Learn more about what short-term health insurance is, why you should steer clear of it, and where to get coverage instead if you’re losing Medicaid eligibility.
What Is Short-Term Health Insurance?
It’s in the name — short-term health plans only provide coverage for a fixed period of time, typically up to three months, according to the DC Department of Insurance, Securities and Banking. They’re meant to cover you while you’re in between long-term plans, which is why short-term health insurance providers may target you if you’re losing Medicaid eligibility.
Short-term health plans can have a low monthly payment. But that comes at the expense of your coverage — these plans don’t provide many of the same benefits as long-term Affordable Care Act plans (also called marketplace plans) because they’re not subject to the same requirements.
Translation: These plans might sound like the cheapest option, but they’re not. You’ll likely have to pay significantly more for health care. You could also miss out on quality, affordable long-term coverage instead (more on that in a moment).
Why You Should Avoid It
Short-term health plans might sound like a cheap option while you figure out what to do next after losing Medicaid eligibility. But they typically do more harm than good when it comes to your physical and financial health.
Here are the reasons why you should avoid short-term health insurance:
It’s usually more expensive than long-term marketplace plans: Short-term health plans are advertised as low-cost. But thanks to generous pandemic-era policies, you’ll likely qualify for subsidies that drastically reduce the cost of a marketplace plan — in fact, it’s possible that you could get coverage for $0 per month. You’ll likely also qualify for reduced cost sharing on a marketplace plan, which means your insurance will cover even more of your medical bills.
The coverage is bad: Not only are short-term health plans often pricier than long-term marketplace plans, but the coverage is significantly worse. Marketplace plans are required to provide certain free health care services like checkups, vaccinations, women’s wellness visits, and more. Short-term plans, on the other hand, often don’t provide any of these benefits for free, meaning you’ll have to pay out-of-pocket for basic services (which could run you hundreds of dollars a visit!).
You might have unexpected bills: Short-term health plans typically don’t have many in-network providers, which means there are limited options when it comes to picking out a doctor. And if you visit a doctor that’s out-of-network, your short-term plan won’t cover it. In other words, you might have to pay a hefty price for routine care (in addition to the monthly cost of your short-term plan).
It might not protect you if you have a pre-existing condition: A House Committee on Energy and Commerce investigation into eight short-term health plan providers found that all of them denied care to people with pre-existing conditions. Here’s what that means: If you have an ongoing health issue, you’ll have to pay your medical bills in full on a short-term plan.
What to Do Instead
As you can see, short-term health plans are costly, lack basic coverage, and can sometimes be downright deceptive. Luckily, though, there are affordable health insurance options without any of those downsides.
Your best bet? Opt for a long-term marketplace plan instead. As mentioned before, it’s likely that you’ll qualify for subsidies or tax credits that lower the monthly price of these plans. That way you don’t have to sacrifice quality for cost. In fact, thanks to these tax credits, 4 out of 5 people can find coverage for less than $10 a month, according to the Centers for Medicare & Medicaid Services.
And you don’t have to wait to enroll: If you lose Medicaid, you can apply for a special enrollment period. This special enrollment period gives you a 60-day window to enroll in non-Medicaid coverage.
Stride can help you do it. We’re an official partner of HealthCare.gov, which means we can find and enroll you in the best plan for your needs so you don’t have to do the work. Here’s what to expect:
You’ll answer a few quick questions about yourself (like your age, location, health concerns, and preferred doctors and prescriptions).
Stride will show you the top plans that match your needs.
Browse the plans and enroll in your favorite.
