The health insurance world is full of confusion. The difference between term health insurance and short-term health insurance is rarely known outside industry professionals. Yet, when it comes time to change your coverage, you need to know your options.
What Is Short-Term Health Insurance
If short-term health insurance could be an option for you, you need to know exactly what this type of benefit covers. In essence, this type of coverage is a temporary form of health insurance that can bridge the gap between being wholly uninsured and being covered by a traditional health plan. These types of plans are usually beneficial for individuals who are unable to afford full health coverage on their own. Short-term plans can last from one month to one year and cannot be extended. These plans do not cover pre-existing conditions and often exclude preventative care. Usually, plans are designed only to cover major medical events. They do not cover treatments for substance abuse or mental illnesses. Furthermore, as these plans cannot be renewed – if you must purchase a new plan after the first one has expired, your new plan may not cover pre-existing conditions that began to occur over the course of the first plan’s term. Your pre-existing condition is any condition that you took medication, consulted a health care professional or have been treated for in the past 6 to 36 months prior to the start of the policy (this varies plan by plan). This definition is often quite different than that used by long-term healthcare plans. Short-term health insurance does not meet the standards set by the Affordable Care Act (ACA). Also known as Obamacare, this act requires insurers to sell health insurance to almost everyone – no matter their health status. This means ACA plans must cover pre-existing conditions that would often be denied by short-term plans.
Why Short-Term Health Insurance
Make no mistake about it – short-term health insurance is not for everyone. However, for many these plans make sense and can save them money and more. Short-term plans are best to bridge the gap in coverage while you’re waiting for your full health coverage to kick in. As well, most of these plans offer lower premiums than traditional health care coverage. These plans also do not have a preferred healthcare provider stipulation. This gives enrollees flexibility in selecting healthcare professionals all over the United States. Lastly, these types of plans often take effect within one to two days of the application date. This quick turnaround leaves you without insurance for a minimal amount of time.
Is Short-Term Health Insurance For You
Even though short-term health insurance may not be for everyone, it may be the best health coverage option for you. If you are in between jobs, a short-term plan may be the perfect option for you. This is especially true if you did not elect for COBRA. As well, if you are waiting for coverage from your group health plan or are waiting to enroll in ACA – short-term plans may fit your needs.
The Pros of Short-Term Health Insurance
If you’re still unsure of the benefits of short-term health plans with regards to your situation, here are a few pros of short-term health insurance:
there’s no waiting around with short-term plans. You’ll often now if you qualify right after your application is complete. Your coverage can begin in less than 24 hours in many cases.
a small gap in health coverage is how many individuals fall into a hole they can’t get out of. Short-term plans can cover these gaps between long-term plans.
short-term plans often incur lower premium costs than ACA plans due to the fact that pre-existing conditions are not covered. Unless you have a pre-existing condition, a short-term plan may benefit you more than utilizing Obamacare.
most short-term plans allow flexible term length. These lengths range from one month to almost one year. This varies by state.
Choice of healthcare professional
short-term plans individuals to go to a number of different doctors and healthcare professionals.
Gives you options on the go
Travelers, seasonal workers, and recent graduates can utilize short-term plans to ensure they have coverage during all walks of their life.
The Cons of Short-Term Health Insurance
However, there are some downsides to short-term health insurance. For most, these plans offer no real benefit. Short-term plans are created for people in certain situations. Thus, here are a few cons to short-term health coverage:
you will not get coverage from a short-term plan if you have a pre-existing medical condition. If you do, your coverage will be severely restricted.
Many services denied
short-term plans do not cover many medical issues. Preventative care, maternity care, mental illness and substance abuse are just a few of the ailments short-term plans will typically not cover.
you cannot qualify for COBRA health insurance once your short-term health coverage ends. This can leave many individuals in a pickle down the road.
Read the fine print
short-term insurance plans often do not have an out-of-pocket maximum. These plans may also institute a limit on the maximum amount an insurer could pay.
once your short-term plans end, you cannot renew it. You may struggle to find a new short-term plan once the old one terminates if you developed a pre-existing condition.
most short-term insurance plans deny coverage to everyone over the age of 65 years old.
Is Short-Term Health Insurance Right For You?
Honestly, it depends on your situation. For many, short-term health insurance can provide them the coverage they need in between different situations. However, short-term plans should not be utilized over the long-term. Individuals and families should look into long-term insurance plans over the long haul. If you are using short-term plans in the short term – they can be great things for individuals and families. After educating yourself on these types of plans, one should seek the help of an insurance expert to guide them through their decision.