Going without health insurance coverage isn’t a good idea, even if it’s only for a short time. You never know when an unexpected illness or injury may happen. If you don’t have a California health insurance policy, you may find yourself with huge medical bills to pay on your own.
There are times you may need to fill a gap in insurance coverage. For example, you’re in between jobs, or waiting for the next Affordable Care Act (ACA) Open Enrollment Period. A short-term health insurance plan is an option for coverage in many states. But California law prohibits the sale of short-term health insurance. Don’t worry — you have other options.
What You Need to Know
Premiums for short-term plans tend to be much lower than those for ACA plans without subsidies.
The sale of short-term health plans is prohibited under California law.
Consider an ACA plan, COBRA coverage, or Medicaid (if eligible) as alternatives to short-term insurance.
What Is California Short-Term Health Insurance?
Short-term health insurance plans provide temporary coverage you can purchase at any time during the year. These medical insurance plans are designed to bridge periods when you may not have healthcare coverage. The plan may start as soon as you enroll.
In many states, short-term insurance plans follow federal rules with terms lasting no more than 364 days a year, but renewals are allowed three times or up to 36 months.1 Other states have developed their own rules and others, including California, prohibit short-term plans altogether.
With short-term insurance in most states, premiums tend to be more affordable than the cost of a marketplace plan without a subsidy. That’s because short-term plans aren’t required to provide the comprehensive coverage that ACA plans do.
Can You Enroll in Short-Term Plans in California?
As of January 1, 2019, the state of California does not allow insurers to renew or sell short-term health insurance plans. The reason for this ban on short-term plans is because they don’t meet state health insurance requirements. For example, short-term plans don’t have to cover preexisting conditions or all the essential health benefits mandated by the ACA.2
Consider all costs
You have other costs besides the premiums. These include copayments, coinsurance, and the plan’s deductible.
What Are Alternatives for Immediate Health Insurance in California?
Since short-term health plans aren’t available in California, you will need to consider other options. These include an ACA plan or COBRA coverage. You can also look into whether you’re eligible for Medicaid.
When choosing any plan, you should consider all plan costs, including deductibles, co-payments, and coinsurance, not just the premium.
Covered California is the state’s own ACA health insurance exchange. The advantage of an ACA plan is you may qualify for a subsidy. You can only enroll in these plans at certain times of the year. In certain situations, though, you may be able to apply outside of the Open Enrollment Period.3
If you lost your job (or retired) and the employer-provided plan, you may be able to continue coverage under COBRA. You will have to pay the entire plan premium under COBRA so it can be expensive. It might be a good option if you need coverage while you wait for Medicare eligibility, for plan coverage with a new employer, or for Covered California’s Open Enrollment Period.4
Medi-Cal is California’s Medicaid program. You may qualify if you meet income guidelines. For example, a household of one may have an annual income of up to $16,395 and be eligible for coverage. It also covers people with a disability, those in a nursing home, refugees living in the U.S. temporarily, people over 65, and people under 21.5
Bridging the gap
Short-term plans offer coverage when you need temporary insurance. But you have other options.
How Does Short-Term Health Insurance Differ from Obamacare in California?
If health insurance companies offer short-term plans in California, you could enroll at any time and be covered immediately. Your monthly premiums f would be lower than what you would pay for an ACA-compliant plan without a premium subsidy.
However, the benefits of a short-term plan would be more limited than those you would have with a Covered California plan. Short-term plans don’t have to cover preexisting conditions or essential health benefits. These include maternity care, prescription drugs, and mental health services. A short-term plan may be a good option if you:
- Don’t qualify for an ACA subsidy and need an affordable alternative.
- Are in relatively good health and don’t access healthcare services often.
- Are aging out of coverage on your parent’s plan. ·
- Need to fill a gap between employer-sponsored coverage and your next job.
- Are waiting to be eligible for Medicare coverage.
On the other hand, ACA-compliant plans are the best option if you:
- Have a preexisting health condition.
- Have a medical condition that requires you to see a healthcare provider often
- Qualify for subsidies that make premiums more affordable.
Who Sells Short-Term Plans in California?
Short-term health insurance plans are not available in California.
If you need temporary health coverage, you need to start shopping for a medical plan that might fit your health needs and your budget, even if it’s not a short-term plan. Insurance companies do offer other options that could fill the gap. Even if they are a little more expensive, they may save you from the expense of emergency care or a hospital stay. Coverage in the short term could save you a lot of money in the long run.