Like the name implies, short-term health insurance is a type of health insurance plan that provides coverage for you for a limited period. Typically, this varies between 30 days to 3 months. However, some insurers may provide short-term coverage that can last for as much as 12 months.
A short-term health insurance plan can protect in cases where you don’t have a standard plan in place due to a wide range of reasons. Many of the basic features of a short-term plan differ from that of a traditional health insurance plan, but they are also quite similar in many respects. Typically, you will pay a lower premium for your short-term plan than you would be required to pay for a full plan. However, this also means that you get limited coverage compared to a full plan.
A short-term health insurance plan covers cases of sudden illness or injury. This cover also includes emergency room visits, prescription drugs, and hospital services (inpatient and outpatient services). You should visit the website of your insurer to read the terms of your contract and find out if your plan covers medications like niacin flush pill and other drugs.
The level of cover you get under temporary health insurance service varies from one insurance company to the other and the type of offer you buy. Short-term insurance plans do not need to comply with the guidelines of the Affordable Care Act.
A temporary health insurance plan does not cover pre-existing health conditions, maternity or pregnancy care, dental appointments or vision care, immunizations, and some other services. Terms may vary from one insurance company to the other. So, you have to check the specific details of the plan to see what is covered or not included in the plan.
When is a Short-Term Health Insurance Plan Appropriate?
A short-term health insurance plan is not the same as a full cover. It can never replace traditional health insurance. This type of health insurance cover is only suitable in some specific instances. Usually, people go for this plan when they are in between standard insurance plans or in the case of a missed open enrollment. Other cases in which a short-term plan may be appropriate include:
- When a quick proof of insurance is needed for any special reason
- Before regular Medicare resumes
- A layoff or job termination
Costs of Temporary Health Insurance Plan
A short-term health insurance plan requires a range of payments and upfront costs. These include:
- Premium: Like regular health insurance, you will be required to pay a monthly fee for your insurance. How much this cost will depend on your level of coverage and the services included in your plan.
- Deductibles: This is one of the main areas where regular health insurance differs from a short-term plan. Insurance companies charge a significantly higher deductible on temporary plans than they would on a traditional plan. You may be required to pay for services out-of-pocket until you meet the criteria for your deductibles.
- Coinsurance: Once you meet your deductible, the percentage of the total cost that you share with your plan is the coinsurance.
- Other out-of-pocket costs: This is the cost you pay by yourself for health care services that are not covered under your temporary plan.
Pros of a Short-Term Plan
The purpose of a short-term plan is mainly to fill the short gaps between your coverage so that you do not lack an insurance plan. A short-term plan is a very flexible insurance option. In most cases, you will be able to terminate this temporary contract at any time without bothering about any penalty. Depending on the insurance company you enroll with, there are different plans available, depending on your exact needs.
Cons of a Short-Term Plan
The major downside to this type of insurance plan is that deductibles are higher than that of a standard plan. That’s in addition to other unforeseen costs that may come up that are not covered under this type of plan. Also, a temporary plan does not provide coverage for any pre-existing condition that a person may have.
How to Buy a Short-Term Health Plan
Not all insurance companies offer temporary health plans. However, for those of them that do, the terms and your experience with them may vary from one company to the other. To buy a short-term plan, you can look for a private company that offers such an option. You will be required to answer a medical questionnaire about your medical history during the application process.
Be sure to read and confirm all the details of the plan and what it includes or excludes before you enroll, since cost and coverage may vary considerably. Short-term plans are not renewable, but when a temporary plan expires, you may be able to apply for another short-term plan. However, be aware that in many cases, any condition you received care for under a previous temporary plan will be treated as a pre-existing condition under the new plan, and you will not be covered, said John O. from gahmj team.
Not everyone qualifies for a short-term health insurance plan. Also, a temporary plan does not cover all health services. Hence, you should get on a full health insurance plan for a comprehensive health insurance cover.