Reports show that approximately 16 million Americans purchase individual health insurance plans each year, many of which are short-term policies. For people who find themselves without insurance coverage because of temporary employment, short-term health insurance coverage is often the answer. Premiums for short-term policies are low, and while the coverage period offered by most insurers ranges from 30 days to 12 months, some plans now offer coverage up to 36 months. While the benefits offered and the length of coverage varies widely among states, short-term plans are designed to cover costs related to emergency medical services or the treatment of a major medical problem that unexpectedly arises.
Significance
With the cost of health care rising, no one can afford to be without health insurance coverage, even for just a short period. Unexpected illness or injury can strike at any time. That is why it's important to have a health insurance policy in place that will cover the cost of medical emergencies. People who buy a short-term health insurance plan typically include those who have been laid off, are between jobs, recently graduated from high school or college, cannot afford COBRA coverage or are only temporarily employed at a job. Plans can be purchased for as few as 30 days, or for up to 6 or 12 months depending on your state of residence.
Considerations
Many health care plans available to temporary employees require no period of open enrollment. Since premiums are paid directly to an insurance company, a person can sign up for health insurance at any time. Workers who are ineligible to participate in a company's benefit programs available to permanent, full-time employees often look into temporary medical insurance to give them basic health insurance coverage at an affordable cost. If you are in good health, approval is usually quick and easy. Most short-term policies have limited underwriting, and coverage often begins the day after the premium has been paid. One important factor to keep in mind, though, is that short-term health insurance policies are intended for limited use; therefore, most are not renewable.
Features
A short-term health insurance plan generally covers many of the same medical expenses as a group health plan. Although the majority of short-term plans do not cover preventive medical services such as routine physician visits, annual physical examinations or immunizations, they will cover emergency care services, surgery, hospitalizations, diagnostic testing and in many cases offer a prescription drug plan. While benefits can vary, many short-term medical plans include different types of limitations and exclusions. Most short-term policies offer a choice of deductibles to meet different budget needs, but still can be an inexpensive alternative until permanent health insurance coverage is in place. Premiums normally are based on age and condition of health, yet most plans are reasonably priced.
Warning
One major drawback of short-term health insurance is that policies exclude coverage for pre-existing conditions for which a person receives diagnosis or treatment within a specified number of months prior to the effective date of the policy, usually within 36 months prior to when coverage was purchased. If you aren't honest when you submit the application, you may end up having payment of claims denied. Whether or not you choose to purchase short-term health insurance, you should not cancel any other health insurance coverage that you might have until your new coverage is in place. In most cases, you must be under the age of 65 to qualify for a short-term health insurance policy.
Expert Insight
Health policy experts recommend shopping for quotes from several different insurance carriers, comparing the benefits offered by at least three companies. Keep in mind that the length of time for approval can vary. Although most times approval is quick, it could take up to several weeks if medical records must be requested from several different health care providers. Pregnancy is not covered unless serious complications arise, which could affect a woman's overall health. While short-term health insurance coverage can be cheaper than other alternatives, consumers should consider the amount of the deductible and other out-of-pocket expenses involved before purchasing a policy.
Misconceptions
Many people do not realize that an employer is not obligated to provide its employees a Group Health Plan. The good news is that short-term health insurance plans are not geared toward individuals alone. Families and groups may choose short-term coverage as well.
Benefits
There are many potential health risks associated with being uninsured. Purchasing a short-term health insurance plan can help to protect both individuals and families from the unexpected cost of major medical bills. Premiums are now quite competitive in the short-term insurance market, with insurers offering a variety of low-cost, affordable options to health care consumers. Unlike HMO's and PPO's, companies typically allow the insured to go to any physician or hospital of choice. Coverage can usually take effect within 24 hours of approval and payment of the first premium. Premiums can be paid in monthly installments, which is often easier on the budget.
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