Health insurance is one of those things you really want to have but hope you never have to use. It is no secret that medical costs in the United States are astronomical and just one visit to the hospital can potentially expose you to financial ruin. If you find yourself with a gap in coverage for any reason, short term health insurance may be the solution to this potentially costly problem, though not for everyone.
Short term medical insurance may benefit you in several instances and protect you until your long-term coverage resumes. Examples include being in between jobs, new employees waiting to become eligible for their company’s plan (which can be as long as 90 days in some instances), recent college graduates and individuals who lose their dependent status and can no longer be included on their parent’s plan.
The exact qualifications will depend on the policy, but generally, this type of insurance is designed for healthy individuals under the age of 65. You are also able to get coverage for spouses and children.
Short term medical insurance typically lasts from one to six months, but some companies may offer coverage for up to one year. Policies can usually be renewed for a total of 36 months, though some companies may have a limit on the number of renewals. If you file any claims during your policy period, future coverage — should the company grant a new policy– for any conditions diagnosed or treated will most likely be excluded from coverage.
These plans are designed to insure against unexpected illness and accidents. They are really not designed for things such as routine doctor’s visits, preventative care, dental care or vision and plans will typically not offer coverage for such. They also do not provide coverage for costs associated with pregnancy or childbirth.
Short-term health insurance policies do not cover pre-existing conditions. What is considered pre-existing can differ by state, but typically includes any condition diagnosed and/or treated within the previous three to five years. If you have a pre-existing condition that requires active treatment and you are about to lose standard coverage, you should consider extending that plan through COBRA, a government act which allows people to maintain employee-sponsored health insurance for a set amount of time after leaving their job, though you will now be responsible for paying the entire premium.
If you have pre-existing conditions and opt to get a short term medical insurance plan to provide coverage for other issues you may encounter, this will make you ineligible for HIPAA plans, which provide guaranteed coverage for individuals with pre-existing conditions who have trouble finding policies in the private insurance market.
Providers typically offer the option to pay monthly or to make one single payment upfront. If you are unsure about how long you will need coverage, selecting a monthly payment plan may be the better option. If you know for sure how long you will need a policy, a single up-front payment may save you some money over a monthly plan.