Short-Term Medical Plans
Short-Term Medical (STM) plans provide temporary coverage for people that need quick and affordable health insurance. A Special Enrollment Period (SEP) isn’t required. STM plans are for people who experience a temporary coverage gap in major medical insurance offered by an employer, a State-based Marketplace (SBM), or the Federal-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 changed to limit the initial contract term to three months or less, and the maximum coverage period to four months or less. This includes any renewals or extensions.
Policies sold before September 1, 2024, can continue to comply with the 2018 definition, which defined STM plans as coverage with an initial contract term of less than 12 months and a maximum total coverage period of up to 36 months.
The exact coverage and benefits offered by an STM plan depend on the policy and insurance carrier you choose. The plans typically cover some health care 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, Maine, Massachusetts, New Jersey, New Mexico, New York, Rhode Island, Vermont, and Washington.
Underwriting
An STM application goes through underwriting after its submission. 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. Therefore, in addition to paying the plan's premium, you're also responsible for paying an annual deductible and 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 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 QHP.
Disadvantages
Coverage is generally very sparse. It isn’t meant to replace major medical long-term.
There are high deductibles.
Deductibles don’t apply to the Max-Out-of-Pocket limit.
Your application is subject to medical underwriting.
The Initial premium is due with 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.