Healthcare’s one of the biggest worries for Americans across the country. Despite the government’s efforts to make affordable health insurance packages more freely available, many citizens remain under-insured and vulnerable.
Over 50% of the population relies on their employer for healthcare coverage, but what happens if you lose your job?
Fortunately, short term health insurance plans can help fill the gap.
Defining Short Term Health Insurance Plans
Short term health insurance plans are a type of limited duration health coverage. It’s intended to provide short-term coverage for US citizens who are in between health plans, or outside the enrolment period for their first health insurance plan.
For example, if you’ve recently graduated, lost your job, or resigned and are looking for new employment. They’re a good back up plan in case of an emergency and can provide a lot of peace of mind while you’re excluded from the realm of traditional medical coverage.
Short term plans aren’t the same as catastrophic plans, also known as high-deductible plans. These plans also have low monthly premiums but offer limited services.
They’re an affordable way to save up for hospital expenses for serious medical situations. Some may cover a few routine procedures like vaccinations too. You’ll pay for most other medical expenses yourself.
Previously, you could only receive short term health coverage for three months,. The Trump administration recently extended this to one year. There’s a possibility they could further extend this to two years in the future.
Before you rush out and buy this type of insurance, find out more about why you should or shouldn’t apply, as well as what you’ll get for your hard-earned money.
What Do Temporary Health Insurance Plans Cover?
Short term health insurance plans aren’t available in every state, so checking the rules for your area’s step one.
Like all healthcare plans, short term plans vary in the amount of coverage offered as well as the costs involved. Short term coverage falls outside the ambit of the ACA and doesn’t have a standard list of prescribed benefits.
These plans don’t need to comply with the list of compulsory benefits that ACA-approved plans must offer. So, temporary health insurance plans can afford to offer low premiums to their members.
Usually, these types of plans are low-coverage, low-cost plans that serve as a back-up in the event of a medical mishap while you’re in between plans. In general, these types of plans only cover emergency-related health care, urgent care, preventive care, and limited doctor visits.
Most temporary health insurance plans don’t cover the following medical issues:
- Maternity care
- Mental health consultations
- Outpatient prescription drugs
- Substance abuse treatment
Be sure to go through the exclusions and limitations section of any policy before you sign up.
How Much Do Short-Term Health Plans Cost?
Like the coverage offered, short term insurance plans vary considerably when it comes to how much you’ll pay for them. In general, you can expect to pay around 80% less than you would for a private health insurance plan.
As a ballpark figure, you can count on paying between one and two percent of the median income for short term coverage. Typical costs involved in short term health insurance include:
- A Monthly Premium according to the coverage you choose
- Out-of-pocket costs for services until you meet your deductible
- Co-insurance costs which are a portion of the amount owed when you meet your deductible
- A Copay fee for doctor visits
- Out of pocket costs for services not covered by your short-term plan
Read your policy clearly before you sign up and ask questions if you’re unclear about any of the costs involved. Since these short-duration plans vary so much, it’s important to compare costs according to the services you’re most likely to require during the year.
What Are the Benefits of This Kind of Health Insurance?
The obvious benefits of these brief health insurance plans are low-cost coverage when you have no alternative. There are a few more pros associated with this kind of coverage though.
You can sign up at any time of year, renew your policy twice, and cancel whenever you want to without penalties. Short term coverage can apply within a day and usually commences within two weeks of joining the plan unless you specify otherwise.
You can include your spouse and dependants in your coverage, provided you all meet the medical requirements of the plan you’re signing up for.
There are plenty of choices available regarding cover and you can also combine the plan with supplemental insurance plans covering things like critical illness, accident, vision, and dental.
Are There Any Drawbacks to Short Term Health Insurance?
Although non-compliance with ACA terms and conditions means that you have total flexibility when it comes to choosing a short term policy, these policies aren’t a good fit for extended or extensive health coverage.
Remember, these types of brief health insurance coverage are a temporary solution. They’re designed to discourage you from using them for an extended time frame.
As such, there are a few drawbacks associated with temporary health insurance.
You can’t get a federal subsidy to help afford short term health insurance like you can with ACA-compliant insurances.
Unlike ACA-approved plans, anything you’ve received treatment for under a previous plan’s considered a pre-existing condition. So, short term plans can deny you coverage based on your health.
If you’re accepted despite pre-existing conditions, you could end up paying more for your temporary plan. The plan might also exclude any costs relating to this condition.
You’ll probably have to fill in a medical questionnaire when you apply for this coverage, and the covered costs are often severely limited.
You’ll have difficulty finding a plan that covers prescription medications or chronic medications.
Deductibles are usually significantly higher than with ACA-approved plans and there’s often a low cap on how much coverage you receive for treatment. You’ll have to pay the balance out-of-pocket.
It’s important to sign up for an ACA-approved plan as soon as you can, either via your employer or with one of the Marketplace offerings.
Comparing Short Term Health Plans and ACA Health Plans
To keep their costs low, short term health insurers, rely on the limited duration of their memberships. So, they’re never suitable as a long-term solution.
In general, over time, you’ll end up paying more for a short-term plan as your benefits start to run out.
ACA-compliant plans are bound by strict rules to provide medical care as prescribed by the government. They must offer a wide range of essential medical services including maternity care and mental health treatments.
Should You Get a Short-Term Health Plan?
Short term health insurance is an excellent, affordable option for those who want to safeguard their health when they fall outside of traditional healthcare coverage.
This type of temporary insurance is a good fit for you if you’re looking to fill gaps in coverage, missed the ACA enrolment period, or are waiting for your new coverage to commence.
It’s a lot better than no coverage at all if you fall into one of the above categories.
Shopping for Short-Term Health Insurance
There are thousands of temporary health insurance policies available to choose from, so consider all your options before signing up for the first one you find online.
You can’t buy temporary health insurance via the Health Insurance Marketplace. Only private insurance companies offer these policies, and not all of them offer these types of plans.
To get started, search for a reputable insurance company. It’s a good idea to go with one that you know and trust. Otherwise, online reviews can help you find an insurer that seems above board.
Always read every detail before you sign any contract to ensure you’re getting the best deal for your needs. With so many to choose from, you’re bound to find one that meets your expectations.
Finding the Best Solutions For You
There’s no doubt that short term health insurance plans fill a glaring gap in the market. They’re a fantastic backup plan when you don’t have access to traditional medical insurance.
Do you have more questions concerning making good consumer decisions or other issues?
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