Short-term health insurance, also known as temporary insurance, is medical insurance that offers coverage for a short period of time. A short-term insurance plan typically lasts six months or less, according to John Williams, a member of the National Association of Health Underwriters and vice president of Employees Benefits Group, Inc., an insurance brokerage and consulting firm in Bethesda, Maryland.
Purpose
Short-term health insurance is a way to make sure you don’t go without coverage due to temporary situations that leave you without insurance. This type of health insurance may be appropriate for newly hired employees waiting for employee-sponsored insurance to kick in, temp or seasonal workers, people on strike, military discharged personnel, early retirees and people experiencing other life changes causing a gap in health insurance coverage, says Williams. As of 2010, the COBRA law allows employers to extend coverage after a worker leaves the job, but short-term insurance may be less expensive, according to Assurant Health.
Features
Short-term health insurance covers basic expenses that may be incurred during a serious illness, accident or medical emergency. Expect the policy to include office visits, laboratory tests, ambulance charges, hospitalization and prescription drugs, says Williams. You can go the physician or facility of your choice. Short-term insurance plans are not renewable, but you may be able to apply for another temporary plan if there have been no significant changes in your health status, according to Assurant Health. Don’t expect coverage beyond a year, however, cautions Williams.
Advantages
Short-term health insurance is less expensive than permanent health insurance. The cost is often half that of a traditional plan with similar deductibles, says Williams. In 2010, insurance companies offered individual short-term policies starting at around $67 per month with a $2,000 deductible. Because these policies cover pools of healthy individuals and families for a short period and insurers expect few claims, premiums can be kept low, explains Williams. Coverage can be activated quickly--as soon as one day after completing the application.
Disadvantages
Short-term insurance coverage is not as extensive as permanent plans. This type of insurance won’t typically cover pregnancy, childbirth, wellness doctor visits, vision or dental. As of 2010, short-term health insurance excluded pre-existing conditions. And you probably won’t be accepted for coverage if you’ve ever been turned down for health insurance, Williams stated in 2010.
Getting Started
Contact your state’s insurance department and ask for a list of agencies that sell temporary or short-term health insurance. The availability of temporary insurance varies from state to state. In addition to insurance agencies, some professional organizations and associations offer short-term plans, says Williams. Read the policy carefully to be sure you understand the exclusions and limitations before signing up.
References
- John Williams, a member of the National Association of Health Underwriters and vice president of Employees Benefits Group, Inc., Bethesda, Md.
- Assurant Health: Compare Individual vs. Short Term Health Insurance
- Assurant Health: Short Term Medical Insurance
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