Short-term health insurance—which typically provides coverage for one year or less—is a less expensive alternative to other healthcare plans. Perhaps you lost your job or are between jobs, are looking for less expensive coverage or you’ve aged out of your parents’ plan.
Unfortunately, if you live in New York, you can’t buy a short-term insurance plan. That’s because the state requires that all healthcare plans be renewable. Since short-term plans by definition aren’t renewable, they aren’t allowed.1
To find short-term health coverage while you’re living in New York, you’ll have to explore other options, some of which are detailed below.
What Are Other Options to Short-Term Health Insurance in New York?
There are three main options for short-term health insurance if you live in New York: choosing an Affordable Care Act plan; using COBRA; or going on Medicaid.
Affordable Care Act (ACA) Plans
You can sign up for an Obamacare (ACA) plan through New York’s healthcare marketplace.
These plans are based on levels that correspond to the amount of your medical expenses each covers: bronze (60% coverage), silver (70% coverage) and gold (80% coverage).
The benefits of getting your care through New York’s healthcare marketplace include:
- Tax credits that reduce your premiums
- Options for less expensive catastrophic coverage
- Special enrollment periods (SEP) for major life events that allow you to sign up for a plan outside of the typical enrollment period. A SEP is available if you’re moving, getting married, had a baby or adopted a child, or lost your health coverage.
You’ll typically have 60 days before or after one of these life events to sign up for a plan, though you aren’t eligible for ACA healthcare if you can purchase the plan through your employer.
If you lost your job, the Consolidated Omnibus Budget Reconciliation Act (COBRA) allows you to continue with the same health insurance plan you had at your job even after you leave.
There are a couple of requirements you should know:
- You can get COBRA if you quit or are fired for any reason but gross misconduct.
- You have to notify your employer if you want to continue your coverage through COBRA.
- You have 60 days from the day you lose coverage or are notified of your COBRA eligibility to decide.
- Your COBRA plan is good for 36 months from when your employer terminated your original plan.
That said, your premiums are likely to go up since your employer subsidized them and after you leave your job you will need to make up the difference. It may benefit you to choose a short-term health plan if the premium is too high for you to afford.
Medicaid is a program for New Yorkers who can’t afford to pay for their healthcare. You may qualify based on various factors, including whether you earn Supplemental Security Income, your medical expenses or your income.2
The following applicants can get Medicaid through the individual healthcare marketplace:
- Adults ages 19 to 64 who aren’t eligible for Medicare.
- Pregnant women and infants.
- Children up to age 18.
- Parents and caretaker relatives.
All other applicants should apply through their local Department of Social Services.
What Are the Pros and Cons of Short-term Insurance?
Even though you can’t buy one of these plans because you currently live in New York, you may want to know about the advantages and disadvantages of short-term health insurance:
- Short-term plans are usually cheaper than plans you can get through the Affordable Care Act (ACA) marketplace. They’re designed to have a low premium (though your deductible is likely to be high). This alone may be the reason to select a short-term plan.
- It’s easy to sign up for a short-term plan and get coverage quickly when you really need it, such as if you missed out on the ACA deadline to enroll in your state.
- If you’re healthy, a short-term plan could be an excellent fit. The least expensive plans tend to have high deductibles and no copays, but if you never or rarely have to go to a doctor, those higher costs likely won’t affect you.
- You can get quick “gap” coverage if you just got a new job and are waiting for your employer’s health insurance to kick in. With a short-term plan, you’ll have some coverage in the event of a medical emergency.
- If you have a preexisting condition or other chronic condition that requires frequent doctors’ visits and medical procedures and/or medication, a short-term plan probably isn’t your best option. People with a serious chronic illness may find that their out-of-pocket costs are high and, in some cases, insurers won’t approve coverage via a short-term plan for those with a preexisting condition.
- There’s a limit on what the most plans will cover. So if your short-term plan has, say, a $100,000 limit and the cost of your care reaches that amount, you would be responsible for all costs beyond that until your plan ends.
- Short-term plans may not cover all the “essential health benefits” included in Affordable Care Act plans. If you need these, you may want to avoid short-term insurance and go with an ACA plan. According to Healthcare.gov, those benefits include:
- Ambulatory patient services
- Emergency services
- Pregnancy, maternity and newborn care
- Mental health and substance use
- Prescription drugs
- Rehabilitative and habilitative services and equipment
- Lab services
- Preventative and wellness visits/chronic disease management
- Pediatric services (including dental and vision)
How Much Do Short-Term Plans Typically Cost?
The cost of any plan will vary depending on your coverage, but it will include four main expenses: premiums, deductibles, copayments and coinsurance.
Your premium is the amount you pay each month to have health insurance. Premiums for short-term plans tend to be lower than for renewable plans.
A deductible is the amount you’d need to spend on medical services before your plan’s coinsurance kicks in. (Coinsurance is explained below.)
Your copayment is a set amount you pay for medical services before you meet your deductible. The most common copayments are for visits to your primary care doctor, specialists or urgent care.
The least expensive short-term plan an insurance company offers may not include a copayment for primary care, specialist or urgent-care visits. That means you would need to pay for visits until you’ve reached your deductible. However, if you pick a slightly higher plan, it may give you the option of copayments.
The biggest cost of a temporary health plan is coinsurance. This is the share you pay for medical services after you meet your deductible. So, if you have to get a $1,000 MRI and your coinsurance is 20% after meeting your deductible, you’ll pay $200. However, if you have not yet met your deductible, you’ll need to pay the full $1,000 cost.
Therefore, when you’re choosing a short-term insurance plan, you should consider:
- Your plan’s deductible
- How often you go to a primary care doctor or specialists
- Any ongoing medical conditions you’re managing, including the cost of medication
How Do You Buy a Short-Term Insurance Plan?
The best way to buy a short-term insurance plan is to use a website that gives you quotes for multiple plans available in your area. These sites don’t offer the plans, but they make it easier to compare several insurers who sell short-term policies. Be aware that these sites can charge a fee.
Because New York doesn’t offer short-term health insurance, you won’t be able to compare insurance plans on these sites, but you can use them for dozens of other states.
Although New York doesn’t offer short-term medical insurance, you can apply for COBRA and Medicaid or for an ACA plan.
Keep in mind that your premium for COBRA and ACA plans will likely be higher than short-term medical plans, but the copays, coinsurance and benefits are apt to be better.