It
may seem like a few months without insurance is no big deal, but a serious
accident or sudden major illness could leave you with hundreds of thousands of
dollars in medical bills. Short-term
health insurance is designed to protect you from these
types of worst-case scenarios without costing an arm and a leg.
Most
short-term health insurance plans have benefits similar to that of a major
medical plan, with one important exception: they are designed to protect you
against sudden illness or injury, and typically do not include preventative
care benefits.
Who needs short term health insurance?
A
short term insurance plan is a good if you are:
§ Waiting for approval on a permanent
major medical plan
§ Between group plans for less than a year
§ A recent graduate (possibly with a
starting date for a job with health benefits)
§ A seasonal employee
How can you buy short term health insurance?
Because
not all carriers offer short-term health insurance in all states, you can find
out what options are available by calling a licensed short-term health
insurance agent at 866-602-8466. Once you decide on a plan, enrolling is easy.
Your eligibility is determined by answering a few basic health questions and
you are approved within 24 hours. Some short-term health policy carriers we
recommend are: HPA, Golden Rule, United Healthcare, and Assurant health.
What are some benefits of short term health insurance?
Short-term
health insurance coverage starts almost immediately and is guaranteed to be in
place for 6-12 months.. If you need it longer, most plans allow you to re-apply
for coverage. All eligible dependents can also be covered. Short-term plans are
usually 20-30% cheaper than a major medical plan and can be a useful complement
to a major medical health insurance plan to offer immediate coverage during
lengthy underwriting periods.
What risks are involved with short term health insurance?
If
you have a serious injury or illness while covered by a short-term health plan,
you’ll be covered through the remainder of your plan’s term, but because
short-term health plans are not regulated by HIPAA, they are not “guaranteed-renewable.”
This means that the insurance company may decline future attempts to re-apply
for coverage after your initial coverage period ends. Also, if you re-apply and
are approved, any medical conditions diagnosed during the first term of your
policy would be excluded in your new policy.
If
you were recently laid off, beware that purchasing short-term health insurance
disqualifies you for COBRA. As a general rule, always keep in mind that
short-term health plans are a great temporary fix, but certainly not a
replacement for a major medical insurance policy.
An example of a short term product and how it works:
Sally bought the HCC Life Short
Term medical plan with a $1,000 deductible, 80/20 co-insurance (insurance
company pays 80%, Sally pays 20%), and a $5,000 out-of-pocket maximum.
Let’s say Sally falls and breaks her leg, resulting in a total medical bill of $15,000. She would first pay her $1,000 deductible, which leaves $14,000. Then, she would pay 20% of the remaining expenses until her out-of-pocket maximum of $5,000 is reached.
Let’s say Sally falls and breaks her leg, resulting in a total medical bill of $15,000. She would first pay her $1,000 deductible, which leaves $14,000. Then, she would pay 20% of the remaining expenses until her out-of-pocket maximum of $5,000 is reached.
After
Sally reaches her out-of-pocket maximum, the insurance company will cover 100%
of the medical bills, subject to the policy’s limits. Sally’s total
out-of-pocket: $1,000 deductible + $$5,000 in co-insurance = $6,800. The
insurance company pays $9,000.