Short-Term Health Insurance Plans
If you are in the market for temporary health insurance, then short-term health insurance is the best option.
Just like the name suggests, your insurance will be short-term, meaning that your insurance has an end date and your benefits will stop on that date. You cannot extend a short-term health insurance plan, but when your original plan comes to an end, you do have the option of starting a new one. In this case, an additional term of coverage will then be allotted to you. If short-term insurance is what you are looking for, then it is important to know the details of the insurance plans and what they entail. For more information on what exactly short-term health insurance is, what it covers, how it measures against major medical insurance plans and more, refer to the sections below.
What is short-term health insurance?
As stated above, short-term health insurance is a temporary coverage plan that has a specified end date. If you are not quite ready to sign up for a major medical insurance plan but need coverage for a few procedures, then these plans are ideal for you. Another advantage of short-term insurance plans is that they are typically affordable. Most companies can offer you a wide range of plans that cater to your financial abilities. Most plans cost a little over $100 on average.
It is important to know that short-term insurance is limited. This insurance is intended to give you protection from out-of-pocket costs in the event of unexpected injuries or hospitalization. You will not be able to use short-term insurance to cover prescription drugs. It does not usually cover maternity care or care for pre-existing medical conditions either.
Short-term insurance plans will typically set a dollar limit on how much they will pay for covered services while you are using the plan. While you may receive great coverage for short-term needs, there is a possibility that you will face an Affordable Care Act penalty on your federal tax return for using only short-term insurance. This can happen if you are under-insured through your short-term insurance plan. There is also a chance that you will be declined when applying for short-term insurance plans, depending on your personal medical history.
You can opt to apply for short-term coverage year-round. Some companies even offer short-term plans that are “guaranteed issue.” In this case, it is not likely that your insurer will decline your application based on your medical history.
Besides the obvious difference of short-term insurance being temporary and major medical insurance being continuous, there is another key difference between the two. If you are signing up for coverage through a major insurance company, then the usual waiting period for coverage to start is two to six weeks. Short-term plans start within the first 14 days of approval.
How Short-Term Insurance Works
There are certain factors that must be considered when dealing with short-term insurance plans. These factors include benefits, out-of-pocket costs and other terms. You can expect short-term insurance to work similarly to a lot of other forms of health insurance coverage.
With this type of insurance, you will pay a monthly premium in exchange for coverage of your medical expenses. When you are paying a premium for short-term insurance, there are some plans that will use health insurance networks for covered hospitals. Visiting an in-network medical provider will allow you to receive benefits at discounted rates on the procedures you receive. Depending on your plan and the kind of care you are receiving, there is a possibility that you will also have to pay a copayment. You may have to pay for certain procedures out-of-pocket. The out-of-pocket maximum on your plan is the maximum amount that you will need to pay towards your medical services. After this is paid, your insurer will pay the full amount for the medical attention that you receive. It is important to note that the full amount is not your entire bill but the coverage maximum. If you are using short-term health insurance, then it is typical for there to be a limit on how much coverage they will give you. Coverage maximums are the maximum limits of coverage you can receive for different medical services on your plan.
When you sign up for short-term health insurance, you will receive certain benefits. These benefits include doctor’s visits, emergency care benefits and hospitalization benefits. When you visit the doctor, that appointment will usually be covered by a copayment or an annual deductible. It is important to note that some plans can limit the number of visits you are allotted or exclude specific doctor’s visits from coverage. There are some plans that also have copayments for emergency care. If you are not admitted to a hospital but received emergency care including visits to the ER and ambulance trips, then there are some plans that will only pay up to a set dollar amount. This all depends on the type of emergency care you receive. Depending on the plan, you will either pay a copayment or a percentage of your bill.
Short-term health insurance plans are not created for long-lasting coverage. They are designed to give you coverage in the case of an unexpected injury or serious injury. Depending on your plan, coverage for hospitalization will vary. There is also the possibility of your coverage being capped when a specific dollar amount is reached.
When using short-term health insurance, you may have to pay a deductible. Deductibles are what you must pay before your insurance plan starts paying for certain medical expenses. You can expect an annual deductible with almost all short-term plans. Short-term plans can also ensure you through co-insurance, which means you would have to pay a percentage of the medical costs and your insurance would cover the rest.
When should I get short-term health insurance?
There are certain periods when you should consider signing up for short-term health insurance. This type of insurance is best if you are waiting for employer-based coverage to begin. In most cases, in order to sign up for a major insurance plan, you have to have had a qualifying event. You must either be married, have experienced the birth of your child or have just lost your employer-based coverage. Short-term insurance plans do not require any of these criteria to be met in order for you to be accepted. If you have not experienced any qualifying life events but want insurance, then short-term plans are an ideal option.
Lastly, it is a good idea to consider short-term health insurance if you cannot afford traditional major medical coverage. Short-term plans can offer temporary coverage assistance at a much lower price than normal insurance.