Short-Term Medical Plans
Short-term medical (STM) plans offer temporary coverage for individuals who require quick and affordable health insurance. A Special Enrollment Period (SEP) isn’t required. STM plans are for individuals who experience a temporary coverage gap in major medical insurance offered by an employer, a state-based marketplace (SBM), or the Federally Facilitated Marketplace (FFM). Plans can’t be used if you’re Medicare-eligible.
Coverage
STM plans aren’t a substitute for major medical plans and have benefit limitations. STM plans aren’t Affordable Care Act (ACA) plans and don’t cover the 10 Essential Health Benefits. Each state has its own regulations for STM plans.
As of September 1, 2024, the federal definition of STM plans was changed to limit the initial contract term to three months or less, and the maximum coverage period to four months or less, including any renewals or extensions.
Policies sold before September 1, 2024, may continue to follow the 2018 federal definition of STM plans, which allowed an initial contract term of less than 12 months and a total coverage duration of up to 36 months, including any renewals or extensions.
The exact coverage and benefits offered by an STM plan depend on the policy and insurance carrier you choose. The plans typically cover some healthcare costs related to unexpected illness and injury that aren’t linked to a pre-existing condition.
Availability
STM plans aren't available in California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Massachusetts, New Jersey, New Mexico, New York, Rhode Island, Vermont, and Washington.
Underwriting
An STM application goes through underwriting after it is submitted. This means you’ll be asked about any medical conditions you have and what medications you’re taking. An application may be denied if you have pre-existing conditions.
Costs
STMs have cost-sharing arrangements. In addition to the monthly premium, you're responsible for paying an annual deductible, as well as coinsurance or copays for covered services.
Network Coverage
Many STMs include a network of participating health care providers. You must use the hospitals, doctors, and other providers in the network to receive the maximum plan benefits.
Advantages and Disadvantages
The following are the most common advantages and disadvantages of STM plans:
Advantages
Plans fill unwanted gaps in coverage. (An SEP isn’t required.)
Plans can go into effect as early as the next business day.
You can re-enroll at the end of each term.
You can cancel the plan at any time.
Plans have lower premiums than the typical ACA plan.
Disadvantages
Coverage under STM plans is typically limited and not intended to serve as a long-term substitute for major medical insurance.
There are high deductibles.
Deductibles don’t apply to the maximum out-of-pocket limit.
Your application is subject to medical underwriting.
The Initial premium is due with the application.
Additional application fees may apply.
Additional restrictions may apply for re-enrollment. (e.g., if you develop a serious medical condition, it’s unlikely you’ll be able to get back into the plan.)
There is a lifetime maximum or policy maximum on medical benefit.
Prescription coverage, if available, may have a separate lifetime maximum benefit.