People who have a temporary need for health insurance, like those who are in-between jobs, may consider short term health insurance. Short-term health insurance plans last for only a few months, but can be as short as a single month but are typically less than 12 months. Some plans even let you add a spouse or dependent. Once the insurance plan expires, you may be able to renew or reapply for the insurance. Unfortunately, claims made while you were covered under the insurance may be considered pre-existing conditions. You’ll be turned down for subsequent coverage if you have a pre-existing condition.
Short-term insurance plans may only cover a certain number of doctor visits per term. Shorter terms cover fewer doctor visits. You may have a co pay and the insurance provider may require you to go to an in-network physician. Deductibles vary by plan and the provider may allow you to choose your deductible. In general, higher deductibles mean you’ll pay a lower insurance cost, but you’ll have to pay more out-of-pocket before the insurance kicks in.
Who Needs Short Term Medical Insurance?
You might need short-term medical insurance if:
- You recently graduated college and you can no longer be covered under your parents’ insurance plan.
- You’re in-between jobs or have been laid off,
- You just started a new job but have a waiting period before your health insurance benefits begin, or
- You’re a seasonal employee without a long-term health insurance,
- You’re waiting for Medicare to kick in,
- You’re recently been discharged from the military.
While you may be eligible for COBRA if you recently left a job or you become ineligible for a parents’ plan, the premiums are expensive. Under COBRA, you’d be responsible for paying the full cost of insurance, which could be hundreds of dollars a month. Not only that, you have a certain amount of time to take advantage of COBRA, if that time period elapses, you can’t invoke your rights to COBRA. If you decide you can’t afford COBRA coverage or you’ve waited too long, short-term insurance can tide you over until you get long-term insurance plan.
Many short-term health insurance policies will cover hospitalizations, but they may require you to get pre-certified before you can be admitted it’s important that you follow the pre-certification process, otherwise, the insurance company may not cover the hospital expenses. Hospitalization for an illness or injury may be considered a pre-existing condition on a future short term health insurance application.
Premiums are typically lower than long-term insurance plans. Non-smokers under age 30 get the best insurance rates. You may be required to pay your premium in full upfront for the entire term of the plan. Plans that don’t require you to pay your plan in full may provide a discount if you do pay the full premium upfront rather than making monthly payments.
You may feel like you can make it just a few short months without insurance coverage. However, if you have to be hospitalized for any reason or if you’re in an accident, out-of-pocket expenses could push you into bankruptcy. With a short term health insurance plan, these types of visits are covered saving you from the financial responsibility.
A lapse in insurance coverage could leave you ineligible for certain group insurance plans, especially if you have a pre-existing condition. So it’s important to make sure you don’t leave a gap in your insurance coverage.
Most short term insurance plans will deny you if you have a pre-existing condition within the past 24 to 36 months. These short-term plans also do not cover pregnancy or delivery expenses.