Health insurance is almost as essential as having food and water. It is used to protect consumers from the increasingly high cost of health care, helping to pay for medical expenses ranging from everyday appointments, prescription costs, hospital bills and more. So, what exactly is short-term health insurance?
According to the U.S. Census Bureau roughly 55 percent of United States Citizens get their health insurance through their employer in 2010, and only about 10 percent choose to purchase their health insurance directly.
Going with the health insurance that is offered by your employer is nice for many reasons. Your employer probably will offer you an insurance policy that gives you quality coverage at a price that may be discounted when compared to the same coverage with a private health insurance policy. Your company likely bundles dental, health and life insurance together in their employee benefits package, eliminating some of the hassle in finding all coverage on your own. Lastly, the insurance premiums can be taken directly out of your paycheck, eliminating any need to think about an extra monthly bill.
There is one issue with health insurance offered through your employer. What happens when you are not working for some reason? Maybe you are a recent college graduate who does not have the benefit of a parent’s health insurance coverage. Maybe you just started a new job and have to wait for the six-month trial period before becoming eligible for health benefits through the company. Maybe you recently retired and are waiting for your retirement insurance to kick in. Or maybe you simply are in between jobs and have no health insurance in place.
All of these situations mean one thing: an increased risk of high health bills. Without health insurance it is difficult to maintain routine doctor’s appointments, medicine prescriptions and other common health related things. On top of the routine things, you also put yourself at risk of high hospital costs in the event of a random accident, injury, or sickness.
If you want to have medical coverage to pay for the high blood pressure medication you take routinely or if you just want to protect yourself against the high costs of care in the event that you get sick with the flu or injured in a car accident, then you will want to look into a short-term health insurance plan, which can give you the health coverage you need while you figure out your permanent health insurance options.
Short-term health insurance provide what the name says; health insurance coverage for a limited amount of time. Short-term health insurance offers coverage for as little as a month and as long as a year. Other than the limited amount of time that the health insurance plan can last, the insurance will work much like a standard health insurance policy. It can pay for all the prescriptions and appointments that you have regularly as well as give you protection from any of the surprise doctor or hospital visits that may arise while you are without a standard health insurance policy.
WebMD has a great chart that shows the differences between the coverage of short-term health insurance and individual major medical insurance plans. Here is a summary of the chart:
Short-term Health Insurance: Emergency medical care, hospital bills, doctor’s visits (all after a deductible payment).
Individual Major Medical Insurance: Same as short-term with the addition of increased preventative care and prescription drugs.
What it typically does not cover:
Short-term Health Insurance: Pre-existing medical conditions, prescription drugs, preventative care.
Individual Major Medical Insurance: Pre-existing medical conditions.
Who should consider it:
Short-term Health Insurance: People who expect to have permanent health insurance within six months or less.
Individual Major Medical Insurance: Anyone who needs medical coverage and does not have employer-based coverage available to them.
Who shouldn’t consider it:
Short-term health insurance: People who have pre-existing health conditions or need prescription drugs.
Individual Major Medical Insurance: People who have certain pre-existing medical conditions and coverage options through work or parents.
It should be noted that this is based on your average short-term health insurance plan. Your local independent health insurance agent may be able to find you a short-term health insurance policy that does have some additional benefits at an increased cost.
The obvious upsides of a short-term health insurance policy include the fact that it is a temporary and convenient option that is relatively easy to qualify for and can be paid for upfront. The problem is that you can not renew it aver the coverage term runs out and there are some limitations in terms of what benefits you can have. The individual major medical insurance option provides coverage for as long as you need it and can be canceled at any time, but it can be more difficult to qualify for.
Short-term health insurance policies can be renewed at the end of their coverage period, but it should be noted that if you do apply to renew a short-term policy your will be required to go through the process of medical underwriting. During this process the insurer reviews your age, gender, sex and health history to determine how much it will cost to insure you.
Let’s say you have a short-term health insurance policy that you have been renewing for nearly two years. During one of the six-month periods you went to the doctor to report a pain in your leg. The neurologist tested you and all signs were negative. You breathe a sigh of relief that you are healthy, but then the time comes for you to renew your short-term health insurance policy and they deny you coverage. The insurance company does have the right to deny you coverage based on pre-existing conditions and even in this instance where there was not a diagnosis, the insurance company has the right to deny you coverage based on the risk they see in the symptoms that popped up.
COBRA v. Short-term Health Insurance
The Consolidated Budget Reconciliation Act of 1985 (COBRA) is a provision to provide members of a company health plans that have lost their coverage due to a “qualifying event” to continue coverage at the employee’s expense for a period of time. This is a comparable option to short-term health insurance coverage, but there are some distinct differences that should be noted.
If you qualify for COBRA insurance you will receive a letter from your previous employer. If you are offered COBRA then you probably are accepting it. You are choosing COBRA if the following is true:
- If you don’t want to lose comprehensive benefits
- If you want to keep the continual, guaranteed coverage
- If you’ve had ongoing health problems or pre-existing health issues
- If your medications are expensive
- If private insurance denies you
- If you have had recent health issues
- History of medical problems
- If you have found a new job but your new employer does not offer health coverage.
COBRA will provide the same coverage that you had with your employer, but when considering it over a short-term health insurance policy you should wait to see what the COBRA premium will be and compare it to the short-term health insurance policies that your independent health insurance agent will have for you.
How to apply for short-term health insurance
The application process for short-term health insurance policies are very similar to a standard health insurance policy. The policy is primarily designed to protect people against unforeseen medical needs like injuries, and illnesses. It is not meant to provide comprehensive coverage including preventative care, routine health checkups, and immunizations, dental or vision coverage.
Purchasing a short-term medical insurance plan will make you ineligible for any guaranteed health plans like COBRA, which typically are very expensive and generally intended for people with pre-existing conditions anywhere. The average Short-term health insurance plan will not cover pre-existing medical conditions. Short-term policies are meant to be short-term solutions and if you continue to renew them and a condition comes up then it will be difficult to renew a policy.
If you find yourself without health insurance, but know that you may quickly find permanent insurance then a short-term health insurance policy may be a great solution. There are many situations that can arise that leave people without health insurance. Living life without health insurance is always a gamble. It is really easy to be in an office building and catch an illness from someone you shake hands with. It is also really easy to slip and fall on an icy sidewalk and need to go to the doctor for potential concussion symptoms. A simple co-pay for a doctor’s appointment is much more manageable than having to pay for the whole visit out of pocket, which can quickly cost hundreds of dollars. You can purchase a short-term health insurance policy with the help of an independent health insurance agent and as soon as your permanent policy kicks in you can cancel it.
Temporary Health Insurance
Temporary health insurance is just what it sounds like; it is a temporary solution to a short-term health insurance gap. Most plans last one to six months and can be renewed for up to three years. There are many reasons why a person may be temporarily without health insurance coverage; maybe you are between jobs, a recent college graduate, waiting for enrollment into a employer-provided health insurance policy, waiting for approval for a more comprehensive health care policy, maybe you are a recent immigrant or maybe you just recently retired.
All of the above scenarios have one thing in common: no health coverage for a short amount of time. Not having health insurance for any given period of time can be risky. Whether you have a freak accident and need to go to the hospital for urgent care, or you are suddenly diagnosed with a pesky illness that requires medication, the cost for healthcare can be expensive to pay out of pocket. To avoid this high risk a person can get a temporary health insurance policy so that they are covered against these unpredictable occurrences.
In addition to these unpredictable health concerns, a temporary health insurance policy also allows you to be able to maintain your routine checkups. The Institute of Medicine has found that people who do not have health insurance are most likely to postpone important visits to their health care professionals. So if you are without a job but have a routine checkup scheduled in a month, instead of postponing it until you have coverage, just get a temporary health insurance policy to allow you to attend the appointment.
To apply for a temporary health insurance policy, it is simple. Short-term policies are meant to protect people against unforeseen accidents or illnesses, not to provide comprehensive coverage for preventative care, physicals, immunizations dental or vision. Short-term policies will not cover anything related to a preexisting condition.
For people with pre-existing conditions there is an option to go with a HIPPA Plan, which are more expensive but are intended for people with pre-existing medical conditions who have trouble finding health insurance otherwise.
Though most temporary health insurance policies are renewable for up to 36 months, if you file a claim under the policy it may be difficult to renew.
Temporary health insurance policies have low premiums because the insurers have established pools of healthy people and families who only need coverage for a short amount of time. It is because of these low risks to the insurance company that people enjoy low costs for temporary health insurance coverage. Some policies have a per injury or per illness deductible where you pay as treatment is needed and aver you have met the deductible most insurers will pay some portion of the expenses.
Temporary medical coverage is less expensive than traditional health insurance. It will cover you from the day you postmark your application to the day you acquire a full-time health insurance policy. To learn more about some of the coverage restrictions be sure to contact your local independent health insurance agent.
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3.) “What Is Short Term Health Insurance?” HCCMIS What Is Short Term Health Insurance Comments. N.p., n.d. Web. 30 Sept. 2013. <http://www.hccmis.com/what-is-short-term-health-insurance/>.