What You Need to Know
In South Dakota, short-term health policies offer coverage for up to 12 months, renewable up to 36 months.
Short-term plans may be less expensive than those available under the Affordable Care Act (ACA), if you don’t qualify for an ACA subsidy.
Short-term health plans provide less comprehensive coverage than ACA plans and do not usually cover essential health services or pre-existing conditions.
What is South Dakota Short-Term Health Insurance?
Going without health insurance in South Dakota is a risk. If you get into an accident or become unexpectedly ill, you could face steep medical bills. Health insurance offers protection against these unforeseen events.
If you’re between jobs or waiting for other coverage to begin, short-term health insurance may help you bridge a gap in health insurance coverage. Short-term plans are a quick, relatively inexpensive option. But be sure to understand what’s covered. In general, short-term plans have limited benefits and higher out-of-pocket costs.
Bridging the Gap
If you’re between jobs or waiting to enroll in Medicare or an ACA plan, a short-term plan may make sense.
Who Should Buy Short-Term Plans in South Dakota?
When shopping for short-term health insurance plans in South Dakota, here are some things to consider:
- Affordability: The main appeal of short-term plans is their low cost. If you do not qualify for a subsidy under the ACA to lower your monthly premium, short-term plans are a more budget-friendly option. Keep in mind, these low monthly premiums come with less coverage and higher out-of-pocket costs when you need medical care.
- Enrollment: You can enroll in short-term health insurance at any time. If you need health insurance and you’re outside the ACA’s open enrollment period, you can often receive coverage on the same day you enroll. Keep in mind that when your short-term plan expire,s you’ll have to wait for Open Enrollment to sign up for an ACA plan. This is typically November 1 to January 15. Losing coverage through your short-term health plan does not make you eligible for an ACA special enrollment period.
- Your Health Status: Short-term health insurance works best for those who are young and healthy. Short-term plans do not cover pre-existing conditions or the 10 essential benefits of the ACA.1
- Life Events: Gaps in health insurance can occur during life changes, such as:
- A change in jobs or loss of a job
- Your 26th birthday, when you age out of your parents’ plan
- Retirement before age 65
- Loss of a spouse’s health insurance coverage
- Re-location to a new city where your current plan is not accepted
Under some circumstances, a short-term plan may not be right for you. If you have any preexisting conditions, you’ll want to consider other options. Also, if you need the ACA’s essential benefits, such as maternity care, mental health care or prescription drug coverage, a short-term plan is not your best bet.
The pros and cons of short-term plans are:
- Short-term plans are often more affordable than ACA plans.
- You can purchase a short-term plan at any time.
- Unlike ACA plans, short-term plans are not required to cover preexisting conditions or the essential health benefits.
- Out-of-pocket costs are higher with short-term plans.
Know What You’re Getting
Make sure you understand what’s covered—and what isn’t—before you buy.
How Much Are South Dakota Short-Term Plans?
Health insurance costs are complex and vary from plan-to-plan. Here are some of the costs associated with short-term health insurance:
- Premiums — Your monthly payment for your health plan.
- Deductibles — What you pay before your insurance starts to contribute to your medical costs.
- Coinsurance — A percentage of a covered service that you pay after you’ve met your deductible.
- Copayments — Fixed fees for covered services that you pay after you’ve met your deductible. Copays vary by the type of visit, service, or provider.
What Are Rules Governing Short-Term Plans in South Dakota?
Federal rules allow short-term health insurance companies to offer policies of up to 12 months that can be renewed for up to 36 months.2 While some states limit the duration of short-term policies, South Dakota follows the federal rules.3
Many short-term health insurance companies use a process called medical underwriting to determine if they will cover you. This involves an evaluation of your medical history and pre-existing conditions.
Who Sells Short-Term Plans in South Dakota?
Short-term health insurance carriers that offer plans in South Dakota include:
- Independence American Insurance Company
- National Health Insurance Company
- UnitedHealthcare (Golden Rule Insurance Company)
If you’re a South Dakotan experiencing a gap in your health coverage, you have many health insurance options. Whether a short-term plan is right for you will depend on your health status, financial situation and insurance needs.
When comparing your options, make sure to look closely at all the costs from health insurance companies and any limitations in coverage. This will help you choose a plan that meets your needs and avoid unexpected charges when you access medical care.