Guide to Short-Term Health Insurance Cost

Are you experiencing a gap in your health insurance coverage? Whether you’re between jobs, waiting for new benefits to kick in, or just need a temporary solution, short-term health insurance might seem like an easy fix. But before you commit, it’s important to understand the costs and limitations.

You might be asking, How much will this really cost me? Or, will I have the coverage I need? This guide breaks down the true costs of short-term health insurance and helps you determine whether it’s the right fit for your situation. By the end, you’ll have the knowledge to make a confident, informed decision about your short-term health insurance coverage.

What Determines the Cost of Short-Term Health Insurance?

Short-term health insurance costs vary widely depending on several factors. While these plans offer temporary coverage, their affordability and limitations make them a viable option for individuals needing a safety net during transitions. Below are the primary factors influencing the cost of short-term health insurance.

1. Coverage Level and Benefits

Short-term health insurance plans are not required to cover essential health benefits under the Affordable Care Act (ACA). This means the coverage level you choose will directly impact the cost.

• Basic plans: Offer coverage for major medical expenses but may exclude doctor visits, prescription drugs, and preventive care.
• Comprehensive plans: Provide broader coverage, including office visits and some prescription benefits, but come with higher premiums.

2. Deductibles and Out-of-Pocket Costs

Higher deductibles generally result in lower monthly premiums. However, you must pay more out-of-pocket before the insurance begins covering medical expenses.

Deductible Amount	Typical Monthly Premium	Out-of-Pocket Maximum
$1,000 – $2,500	$150 – $250	$3,000 – $5,000
$2,500 – $5,000	$100 – $200	$5,000 – $10,000
$5,000 – $10,000	$50 – $150	$10,000+

3. Age and Health Condition

Your age and overall health significantly impact the cost of short-term health insurance.

• Younger individuals (18-35 years old) tend to pay lower premiums due to lower health risks.
• Older individuals (50+ years old) typically face higher premiums due to increased medical needs.
• Pre-existing conditions are often not covered, and some insurers may reject applicants with prior health issues.

4. Location and State Regulations

Short-term health insurance costs vary by state due to differing regulations. Some states, like California, New York, and New Jersey, prohibit short-term plans, while others, like Texas and Florida, offer multiple options with varying pricing.

State	Average Monthly Cost	State Restrictions
Texas	$180	No major restrictions
Florida	$190	No major restrictions
California	N/A	Short-term plans not allowed
New York	N/A	Short-term plans not allowed
Illinois	$160	Limited to 180 days per term

5. Insurance Provider and Plan Selection

Different insurance companies offer varying plan options and pricing. Some insurers provide customizable plans, while others have standard options with fixed pricing.

6. Length of Coverage

Short-term plans typically last from one month to a year. Some states allow renewal for up to three years, while others limit coverage to six months or less.

• 1-3 months: Lower cost, but limited protection.
• 6-12 months: Higher cost, better coverage.
• Renewable (up to 36 months): More expensive, but provides longer-term security.

7. Additional Features and Riders

Some insurers offer optional add-ons, increasing the cost:

• Prescription drug coverage: Adds $10-$50 per month.
• Telemedicine services: May cost an extra $10-$25 per month.
• Accidental injury riders: Can increase premiums by $5-$20 per month.

Average Cost of Short-Term Health Insurance

Short-term health insurance typically costs between $100 and $300 per month for an individual. However, premiums vary by age, location, and provider.

Cost by Age Group:

Age Group	Monthly Premium
18 – 25	$80 – $140
26 – 35	$100 – $180
36 – 45	$120 – $220
46 – 55	$150 – $280
56+	$200 – $350

Cost by Plan Type:

Plan Type	Monthly Premium	Coverage Level
Basic	$100 – $150	Emergency only
Mid-Level	$150 – $225	Some benefits
Comprehensive	$225 – $300	Broader coverage

Short-term insurance costs less than ACA marketplace plans, but it lacks essential health benefits and subsidies, making it less valuable for those needing comprehensive care.

Additional Costs to Consider

Beyond monthly premiums, short-term insurance includes several hidden costs:

• Deductibles & Coinsurance: A $5,000 – $10,000 deductible means high out-of-pocket spending before coverage applies.
• Copays: Doctor visits often cost $50 – $100, with specialist visits up to $150.
• Prescription Drug Costs: Most plans do not cover prescriptions, leading to $100 – $500 per month in medication costs.
• Limited Coverage: Maternity care, mental health services, and preventive care are typically not included.
• Network Restrictions: Out-of-network care is either not covered or significantly more expensive.
• Renewal Fees: Some insurers charge renewal fees or deny coverage if a new condition develops during the policy term.

Ways to Lower Short-Term Insurance Costs

There are several strategies to reduce short-term health insurance expenses:

• Choose a Higher Deductible: Plans with deductibles above $5,000 have lower premiums.
• Compare Multiple Providers: Rates vary across insurers like UnitedHealthcare, National General, and Pivot Health.
• Opt for Basic Coverage: If you only need emergency coverage, avoid unnecessary add-ons.
• Use Telemedicine Services: Virtual visits are often cheaper than in-person appointments.
• Stick to In-Network Providers: Out-of-network services can cost significantly more.
• Avoid Unnecessary Add-Ons: Riders like prescription coverage and accident insurance can increase monthly costs.
• Maintain a Healthy Lifestyle: Smokers and individuals with high BMIs often pay 20% – 30% more.

Is Short-Term Insurance Cost-Effective for You?

Short-term health insurance is an attractive option due to its lower premiums, but whether it’s a cost-effective choice depends on your specific health needs and financial situation. Below, we explore key factors to help determine if short-term insurance is a smart financial decision or if alternative options may be better suited for you.

Who Benefits Most from Short-Term Health Insurance?

Short-term health insurance is ideal for:

• Healthy individuals who do not require frequent medical care.
• People between jobs who need temporary coverage.
• Recent college graduates without employer-sponsored insurance.
• Early retirees waiting for Medicare eligibility.
• Self-employed individuals looking for an affordable alternative to ACA plans.

How to Decide If Short-Term Insurance is Right for You

To determine if a short-term health insurance plan makes financial sense, ask yourself the following:

• Do I need coverage for a short period (less than 12 months)?

• Am I in good health with no ongoing medical needs?

• Can I afford to pay out-of-pocket for routine care or prescriptions?

• Do I understand the plan’s limits and exclusions?

• Am I comfortable with potential renewal restrictions?

If you answered “yes” to most of these questions, short-term insurance could be a viable cost-effective option.

If you answered “no” to multiple questions, it’s worth exploring ACA plans, employer coverage, or Medicaid instead.

How to Enroll in Short-Term Health Insurance

If you decide short-term health insurance is right for you, follow these steps to get the best plan at the lowest cost:

1. Compare Plans and Providers

• Research multiple insurance companies to compare coverage levels, deductibles, and premiums.
• Look for customer reviews and ratings to ensure good service and claims processing.
• Use online tools like eHealth, Pivot Health, and HealthMarkets to find the best options.

2. Understand the Policy Terms

• Read the exclusions carefully – Ensure you understand what is NOT covered before enrolling.
• Check provider networks – Some short-term plans only cover in-network providers, meaning out-of-network care can be costly.
• Confirm deductible and out-of-pocket costs to avoid unexpected expenses.

3. Check Your State’s Rules

• Some states limit or prohibit short-term health plans, so check whether they are available where you live.
• Certain states allow longer renewals, while others only permit coverage for 6 months or less.

4. Consider Alternative Options

If a short-term health plan doesn’t meet your needs, explore these alternatives:

• ACA Marketplace Plans (especially if you qualify for subsidies)
• Catastrophic Health Plans (low-cost, high-deductible coverage for young adults)
• COBRA Coverage (continuation of employer health insurance)
• Medicaid (if you meet income requirements)

5. Apply and Enroll

• Short-term health insurance applications are typically quick and easy, with no long approval process.
• Some plans can start as soon as the next day, making them a fast solution for coverage gaps.
• Be honest about your health history to avoid denied claims due to undisclosed pre-existing conditions.

Conclusion

Short-term health insurance isn’t for everyone, but it can provide a financial safety net during unexpected gaps in coverage. If you’re considering a plan, focus on what it does and doesn’t cover, ensuring you won’t face unexpected medical expenses.

While it may be a budget-friendly option, remember that essential health benefits and pre-existing conditions aren’t covered. Before enrolling, explore whether an ACA plan or another alternative might offer better protection for your health and finances.