short term health insurance that covers prescriptions

Introduction

In the ever-evolving landscape of healthcare in the United States, millions of people find themselves in transition—between jobs, waiting for employer coverage, or simply needing an affordable temporary option. For many in these situations, short-term health insurance offers a convenient and cost-effective solution. However, one of the most crucial aspects people look for in any health plan is prescription drug coverage. Can short-term health insurance meet that need? The answer is: it depends.

This article explores what short-term health insurance is, how it works, and specifically how it relates to prescription coverage, including its benefits, limitations, alternatives, and how to choose the right plan.

What Is Short-Term Health Insurance?

Short-term health insurance, also called temporary health insurance, is designed to bridge gaps in coverage. These plans typically last between one month to 12 months, with some policies offering extensions up to 36 months depending on state regulations.

Common Reasons to Choose Short-Term Insurance:

• Transitioning between jobs

• Missed Open Enrollment Period

• Waiting for Medicare eligibility

• New graduates

• Early retirees

These plans are not regulated under the Affordable Care Act (ACA), so they are not required to provide the ACA’s 10 essential health benefits—including comprehensive prescription coverage.

Does Short-Term Health Insurance Cover Prescriptions?

The short answer: Some do, some don’t.

Prescription drug coverage in short-term health insurance plans is not guaranteed and varies significantly by provider. Unlike ACA plans, there’s no requirement for short-term insurance to offer comprehensive medication benefits.

Here are the possible scenarios:

1. Some plans include limited prescription drug coverage.

   • Typically only covers generic medications.

   • May require prior authorization or step therapy.

   • Brand-name drugs are often excluded or minimally covered.

2. Some plans offer prescription discount cards.

   • These are not insurance, but they can reduce out-of-pocket costs for common drugs.

   • Offered through partnerships with discount networks like GoodRx or RxSaver.

3. Some plans offer no prescription coverage at all.

   • You’ll need to pay 100% out-of-pocket for all medications.

   • This could be financially risky for individuals with ongoing health conditions.

Pros of Short-Term Health Insurance With Prescription Coverage

1. Lower Premiums

Compared to ACA-compliant plans, short-term plans can be 50–80% cheaper, especially for healthy individuals.

2. Quick Approval

Most applications are approved within 24 hours, and coverage can start as early as the next day.

3. Customizable Duration

You can choose a coverage term based on your needs—whether it’s 30 days or 12 months.

4. Prescription Discounts

Even if full drug coverage isn’t included, discount programs can make medications affordable.

Cons and Limitations

1. Limited Drug Formularies

Prescription lists are often narrow, covering only common generic medications.

2. No Coverage for Pre-Existing Conditions

Short-term plans typically exclude pre-existing conditions, including ongoing medication needs.

3. No ACA Protections

They’re not required to cover maternity care, mental health services, or preventive prescriptions like birth control.

4. Caps and Limits

Some plans have maximum coverage caps—for example, only covering up to $500 per year for prescriptions.

Real-World Example

Let’s say Sarah, a freelance graphic designer, loses her job and needs health insurance while she transitions to a new employer. She takes a short-term policy with a reputable insurer offering:

• $250 deductible

• $50 copay for generic drugs

• $100 copay for preferred brand-name drugs

She uses metformin for diabetes, which is generic and included in the formulary. Her costs remain low during the 3-month gap until her employer’s group plan begins.

Now imagine another freelancer, Jake, takes a plan with no prescription benefits. He pays $120/month less, but his asthma inhalers cost him $300 out-of-pocket each month.

Popular Short-Term Health Insurance Providers That Offer Prescription Coverage

Here are some companies known to offer prescription benefits with their short-term plans:

How to Choose a Short-Term Plan With Drug Benefits

Here are a few tips:

 Check the formulary list:

• This is a list of drugs covered by the plan. Make sure your medications are included.

Compare copays vs. coinsurance:

• Some plans require a fixed copay, others require you to pay a percentage of the drug cost.

 Consider deductibles:

• Plans with low premiums might have high deductibles, meaning you pay more before coverage starts.

 Look for pharmacy networks:

• Are you required to use specific pharmacies to get the discount?

 Review state regulations:

• Some states, like California and New York, do not allow short-term health plans at all.

Alternatives for Prescription Drug Coverage

If your short-term plan lacks good prescription coverage, consider these options:

Prescription Discount Cards:

• Free or low-cost programs like GoodRx, SingleCare, and WellRx.

Pharmaceutical Assistance Programs (PAPs):

• Drug manufacturers often provide medications at no cost to qualifying individuals.

Joining a Health Sharing Ministry:

• Though not insurance, these organizations sometimes reimburse drug expenses.

Low-Cost Retail Programs:

• Stores like Walmart and Costco offer $4 generic drugs without insurance.

Who Should Consider Short-Term Insurance With Prescription Coverage?

• Young, healthy individuals needing coverage for minor health needs

• People in-between jobs

• Students or recent graduates

• Early retirees awaiting Medicare

• Those who missed Open Enrollment but don’t qualify for Special Enrollment Periods

If you’re someone with chronic illness or expensive medications, short-term insurance may not meet your needs.

Conclusion

Short-term health insurance can be a valuable bridge in your healthcare journey—especially when paired with some level of prescription coverage. However, these plans are not one-size-fits-all. While they offer affordability and convenience, they come with significant trade-offs in coverage limits, exclusions, and out-of-pocket costs.

If you’re considering a short-term plan, be sure to carefully evaluate the fine print related to prescription benefits. Understand your medication needs, compare plan formularies, and explore discount options to ensure you’re fully protected during your coverage gap.

By doing your homework, you can find a short-term plan that not only keeps your health covered but also keeps your medication affordable.