What You Need to Know
In Iowa, short-term health plans last up to 364 days, renewable for up to 36 months.
Premiums are usually lower than for traditional health insurance plans.
Short-term plans may offer limited coverage and don’t have to provide essential health benefits.
What Is Iowa Short-Term Health Insurance?
Short-term health insurance is one of the types of coverage available to Iowa residents. Short-term plans, sometimes called limited-duration or temporary health insurance, are meant to cover you during a temporary gap in your medical insurance, not as long-term coverage. For example, you might need short-term insurance after losing your job, graduating from college, missing the annual enrollment period for Affordable Care Act (ACA) coverage, or as a bridge to Medicare eligibility at age 65.
Iowa’s rules for short-term policies follow the federal guidelines. In Iowa, you can buy a policy that lasts up to 364 days and can be renewed for up to 36 months.1
With some plans, you can go to any doctor or facility. With others, you must use a provider network except for emergencies, and you might pay more for out-of-network services.
No Enrollment Period
You can sign up for a short-term plan any time of year.
Who Should Buy Short-Term Plans in Iowa?
A short-term health plan might be helpful if you’re relatively healthy and need a policy until you can get more comprehensive coverage.
Affordability: These plans provide another option for Iowans who might find the ACA individual health insurance market too pricey, especially if they don’t qualify for subsidies on ACA-compliant policies. Temporary health insurance might also help if you earn too much to qualify for Medicaid, or if you lose your job but can’t afford the high premiums for the COBRA medical insurance offered by your former employer.
Enrollment: You can enroll in a short-term health plan whenever you want. However, when your plan ends, it won’t qualify you for a Special Enrollment Period if you want to buy an ACA policy. You’ll have to wait until the next ACA Open Enrollment Period.2
Relatively healthy: As long as you don’t have significant health issues and only expect to need routine medical visits, short-term health insurance could offer enough coverage.
The bridge between coverage: A short-term policy can offer a temporary solution if you’re waiting to be covered by a new employer’s plan or are aging off your parents’ plan.
Keep in mind that if you have preexisting conditions like diabetes or cancer, a temporary health plan likely won’t offer enough coverage. Short-term insurance plans don’t have to cover the “essential health benefits” required by the ACA, such as maternity care or prescription drug coverage. Insurers can also reject you for health issues.
What’s Not Covered
Short-term plans generally don’t cover preexisting conditions.
Pros and Cons of Short-Term Plans
Here are some things to consider about Iowa short-term health insurance plans:
- Short-term plans tend to cost less than plans available through the ACA Marketplace or COBRA.
- Signing up for short-term health insurance is easy, and you can do it anytime. If you enroll online, your policy can start right away.
- If you’re healthy, a short-term plan can provide peace of mind about routine health services or in case of an emergency.
- Iowa plans offer some added protections, including more comprehensive coverage with longer-duration policies.
- You have to answer questions about your health to pass medical underwriting. If you have a preexisting condition, you may be rejected for coverage.
- Even with new rules expanding what short-term policies must cover, you’ll get less coverage than you would with an ACA-compliant policy.
- Because the ACA doesn’t regulate short-term plans, you can’t get premium subsidies, as you would for an ACA-compliant policy through the Marketplace.3
How Much Are Iowa Short-Term Plans?
With short-term health plans, you’ll likely have to pay a monthly premium. You’ll also have a deductible, which is the amount you’ll pay before the plan starts to pay medical claims.
After you meet your deductible, you’ll pay a percentage of medical expenses, called coinsurance, plus a set amount charged for each service called a copayment. Check the details of your out-of-pocket costs before you sign with an insurer.
An out-of-pocket maximum will limit how much you have to pay yourself. Total policy coverage is the maximum amount the insurance company will pay for eligible expenses during the policy period. After the maximum is reached, you’re responsible for 100% of your medical bills.
Monthly premiums range from $118.37 to $381.39, with 20 plans costing between $100 and $200 per month. Deductibles range from $1,000 to $10,000, and coinsurance is typically 20% or 30%. The out-of-pocket maximum ranges from $3,000 to $10,000, and total policy coverage runs between $500,000 and $1,000,000.
One economy plan for this 35-year-old woman in Des Moines includes:
- $118.37 premium
- $10,000 deductible
- 30% coinsurance
- $10,000 maximum out-of-pocket
- $500,000 total policy coverage
A 35-year-old woman in Davenport also has 33 plans to choose from, but premiums run a little lower: from $115.04 to $369.13. The ranges for deductibles, coinsurance, and out-of-pocket maximums are the same. She could buy the same economy plan for a few dollars less or a deluxe plan as follows:
- $369.13 premium
- $1,000 deductible
- 20% coinsurance
- $3,000 maximum out-of-pocket
- $1,000,000 total policy coverage
What Are Rules Governing Short-Term Plans in Iowa?
In response to the U.S. Department of Health and Human Services (HHS) in 2018 extending the duration of short-term policies, the Iowa Insurance Division (IID) adopted administrative rules in 2019 to increase consumer protections and set minimum standards of benefits.
Under the new federal guidelines, initial short-term insurance policies increased from three to 12 months and became renewable for up to three years. Iowa’s new rules include, among others, a free-look period of 10 days after you start the policy, during which you can cancel and get your money back. Also, any renewable policy is guaranteed renewable.5
Policy coverage can vary depending on the length of the term. Policies shorter than 90 days offer less comprehensive benefits and likely won’t cover your preexisting conditions.6 All renewable policies must cover preexisting conditions that arise during prior coverage periods, and after 180 days of coverage, future coverage must include preventive and wellness services.7
The IID must approve short-term policies offered by insurance carriers. Insurers are allowed to require underwriting and deny applications.
Who Sells Short-Term Plans in Iowa?
- Companion Life Insurance Company
- United States Fire Insurance Company
- Freedom Life Insurance Company of America, part of UnitedHealthcare
- Golden Rule Insurance Company
- National Health Insurance Company
- Independence American Insurance Company
- First Chicago Insurance Company
If temporary health insurance in Iowa makes sense for your current situation, research the available insurance companies to find a plan that gives you the most coverage for your money. Make sure you understand the limitations. Remember that the longer your plan lasts, the more comprehensive coverage you’ll get.