Short-Term Health Insurance in Texas

Most Americans only know two ways to buy health insurance: through their employer or through the federal Healthcare Marketplace. 

But there’s a lesser-known third option: the short-term health plan. These plans were once limited to 30 days, but they’ve recently become a viable option for long-term health insurance in Texas and other states.

The rules governing these plans have changed in the last couple years, so many consumers have outdated ideas about how they work and who they’re most appropriate for. Read on to learn more about short-term health insurance plans – where to buy one, how it differs from a regular plan and how to know if it’s right for you.

What You Need to Know

You can buy short-term health insurance plans in Texas for up to 364 days. You can also renew your policy for up to 36 months.

Short-term plans can serve as a bridge between traditional insurance plans, not a complete long-term replacement.

If you recently lost your job and need coverage until you find employment or are not eligible for premium tax credits, a short-term plan may work for you.

A short-term plan may not work for you if are eligible for premium tax credits, have large ongoing medical expenses or major preexisting conditions.

Short-term health plans are best for those who are generally healthy and looking to buy more reliable insurance in the near future. 

Other examples of people who may benefit are those who quit their jobs and need coverage until they find new employment. Those who retire early, can’t afford a plan on the Healthcare Marketplace and aren’t eligible for Medicare may also buy a short-term plan. If you’re married and can’t get on your spouse’s plan yet, then you may want to purchase a short-term plan.

Short-term health insurance usually doesn’t cover preexisting conditions, so anyone in this category should think twice. If you’re diabetic and need to buy insulin every month, you may have to pay out-of-pocket. 

What to Know About Short-Term Health Insurance in Texas

Short-term health insurance is a low-cost option, offering much less coverage than other insurance plans. Consumers usually buy a plan when they’re not eligible for employer-sponsored coverage or missed the open enrollment window for the Marketplace.

Other reasons for buying short-term health insurance include aging out of your parent’s insurance plan or having a waiting period before being eligible for an employer’s plan. Parents can also buy short-term health plans just for their children instead of a full family plan.

Short-term health insurance is less expensive than plans on the Healthcare Marketplace, but it also covers much less. These plans are less expensive because provide the same benefits as major medical insurance, including the 10 essential health benefits offered by Obamacare plans.

These essential health benefits include:

• Outpatient hospital care
• Emergency services
• Hospitalization, including surgery and overnight stays
• Pregnancy, maternity and newborn care
• Mental health, behavioral health and substance abuse 
• Prescription drugs
• Rehabilitative and habilitative services
• Lab expenses
• Preventative and wellness 
• Pediatric medical, dental and vision services

You can buy a short-term health insurance plan anytime you want, whereas traditional plans are only available during open enrollment or after a special qualifying event.

Like other medical plans, short-term health insurance doesn’t include any vision or dental benefits. If you need to visit the dentist or eye doctor, you’ll have to pay out-of-pocket or add supplemental coverage. Prescriptions may be covered.

What to Know about Short-Term Plans in Texas

In Texas, short-term health plans may last up to 364 days before being renewed. Plans may be renewed for 36 months in total. 

Plan costs may vary depending on your age, gender, tobacco use and whether you’re purchasing an individual or family plan. Before buying a short-term plan, make sure you understand the following terms:

Premium

This is the monthly amount you pay to the insurance company in exchange for coverage.

Deductible

This is the total you have to pay before the copayment or coinsurance amount kicks in.

Copayment

Some plans have a copayment or copay, an amount you pay upfront when visiting a doctor. A copay applies only after you’ve met the deductible. Copays are usually low, ranging from $30 to $50. 

Coinsurance

Coinsurance is when the consumer and insurance company split the cost of the amount owed by a predetermined percentage. For example, the patient may pay 20% and the insurance company may pay 80%. Like a copay, coinsurance only comes through once the deductible has been met. 

How Much Is a Short-Term Plan in Texas?

Short-term health plans usually have low premiums and high deductibles. Costs also vary depending on your situation. For example, according to a quote search on Pivot Health, a 35-year-old woman in Dallas would pay $138.75 a month for a plan with a $5,000 deductible, 30% coinsurance, $10,000 out-of-pocket maximum and $100,000 total policy coverage.

Where to Buy Short-Term Insurance Plans

As of June 2020, the following insurance companies offer short-term health plans in Texas:

• Companion Life
• Everest
• IHC Group
• National General
• Standard Life
• UnitedHealthcare

You can contact these companies directly to find your rates. You can also use an independent insurance agent who will compare rates from multiple companies to find the best plan.

Who Will Benefit from a Short-Term Health Plan

Short-term health plans are best for those who are generally healthy and looking to buy more reliable insurance in the near future. You may also consider this kind of coverage if you’re not eligible for premium tax credits (Obamacare subsidies).

Other examples of people who may benefit are those who quit their jobs and need coverage until they find new employment. Those who retire early, can’t afford a plan on the Healthcare Marketplace and aren’t eligible for Medicare may also buy a short-term plan. If you’re married and can’t get on your spouse’s plan yet, then you may want to purchase a short-term plan.

Short-term health plans should be used as a bridge between traditional insurance plans, not a complete long-term replacement.

Why Short-Term Health Insurance May Not Be Right for Me

Because short-term health insurance doesn’t cover most Obamacare essential health benefits, patients may find themselves paying more than they expected for many basic procedures and visits. Also, if you qualify for a premium tax credit, it may make more sense to go with an Obamacare plan if it works for your needs and budget.

Short-term health insurance usually doesn’t cover preexisting conditions, so anyone in this category should think twice. If you’re diabetic and need to buy insulin every month, you may have to pay out-of-pocket. 

State Resources

Texas Department of Insurance
PO Box 12030
Austin, TX 78711-2030
Phone: (800) 252-3439
http://www.tdi.texas.gov

Next Steps

While the low deductible may seem enticing, a short-term healthcare policy also comes with high out-of-pocket costs. To mitigate these, policyholders should research providers before going to the doctor or having lab work done. Costs can vary widely, so it’s best to get several quotes. Call the doctor’s billing office and ask how much your visit or procedure will cost.

You should also compare short-term health plans instead of signing up for the first one you find. Some may provide more coverage than others, which can make a big difference when it comes time to pay the bill. 

You should also compare premiums and deductibles when choosing a plan. A plan with a slightly more expensive premium and lower deductible may be a better deal than one with a lower premium and higher deductible.