Short-Term Health Insurance vs. Affordable Care Act Insurance 

Finding the right individual health insurance plan is tricky, and with all the options in the marketplace, it can be overwhelming. Some companies claim that short-term health insurance is an affordable replacement for an Affordable Care Act plan. While it’s true that short-term health insurance often costs hundreds of dollars less than the monthly premiums of many ACA plans, it doesn’t offer the same type of healthcare coverage. 

Read on to learn the differences between short-term health insurance and ACA plans so you can make an informed decision and get the coverage you need. 

What is Affordable Care Act Insurance?

Affordable Care Act insurance offers many different individual health insurance plans for people to choose from when they aren’t eligible for government-funded programs and aren’t on an employer-sponsored insurance plan. 

An ACA plan can’t legally turn a person down due to pre-existing conditions, such as chronic illness. There’s also a list of ten things that every ACA plan must cover, which include:

  • Preventive and wellness services
  • Pediatric services, including vision and oral
  • Maternity and newborn care
  • Emergency services
  • Hospitalization
  • Ambulatory patient services
  • Mental health and substance use disorder
  • Prescription drugs
  • Rehabilitation services
  • Laboratory services

According to the ACA, short-term health insurance is not considered to meet minimum essential coverage standards. 

What is Short-Term Health Insurance?

Short-term health insurance is an enticing option for many individuals and families. While it’s affordable, flexible, and has year-round availability, it is more limited in what it covers. It’s meant to be a stopgap option for those in-between policies. 

Short-term health insurance covers emergency services, hospitalization, doctor visits, outpatient care, and laboratory services. However, the benefits end there. The other six essential health benefits that are mandatory in ACA plans aren’t covered by most short-term insurance plans. These benefits include the following:

  • Maternity and newborn care
  • Pediatric services
  • Rehabilitation services
  • Mental health and substance use disorder services
  • Prescription drug coverage
  • Preventive care

Furthermore, unlike ACA plans, short-term plans don’t cover preexisting conditions.

In order to get short-term insurance, you must apply, answer several questions related to your medical history and needs, and be approved. These plans also have limited terms, which vary by state.

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