What Is Short Term Health Insurance?
Also known as temporary health insurance, short-term health insurance is intended for individuals in a transitional period of life who want to make sure they have insurance during that time. Coverage on short-term plans does not exceed six months, and typically the benefits are more limited than a comprehensive plan. Some short-term plans can have a wide range of benefits.
Who Should Consider Short-Term Health Insurance?
There are many times in life when you could experience a break in health insurance coverage. Here are the most typical examples of situations that call for a temporary insurance policy.
- Waiting to be approved for health insurance: Those who have applied for individual health insurance have to wait for the insurance company to approve their application. During the time period when the company is deciding upon whether or not to provide you with benefits, or ironing out the details, you may want to consider temporary benefits to protect you and your family while you wait. Also, if you get declined for standard health insurance, you are safe with the short term plan. If a health insurance company denies you coverage, you may be eligible for Medicaid.
- Reached age limit for benefits as a dependent: Individuals who had health insurance through a parent’s plan have their benefits terminated at a certain age (26 in most states), if they are not full-time students. Those who reach this point and are without health insurance have several options. They might qualify for COBRA benefits, though the premiums tend to be costly. Short-term health plans provide adequate medical coverage for a lower premium, and serve as a good back-up plan in case of emergency. During the time an individual is receiving temporary coverage, it is necessary to seek an individual policy or get a job with an employer who has a group plan.
- Newly graduated from college: Some individuals receive health insurance while enrolled as students. If your coverage ends after you graduate, it may be wise to get a short-term insurance policy while you are in search of work with health care benefits or a long term individual plan that you can afford.
- Starting a new job: Those who have been recently hired may be waiting to qualify for their employer’s group health insurance policy. This process can take from one to six months after the day you began employment. For your personal safety, and a positive health insurance history, purchasing a temporary plan is a smart move.
- In-between jobs: Individuals who are out of work need coverage for the time they do not have a plan with their employer. A temporary plan should last for a significant enough amount of time to find a new job with group benefits or to apply for an individual plan.
- Military discharge, early retirees, and individuals on strike: There are a variety of reasons that you may be without health insurance, and a temporary plan can help get you basic benefits while you apply for a public health plan or an individual plan. If you are an early retiree, you may not be old enough to qualify for Medicare and need insurance in the meantime.
Short-Term Plan Details
Short-term health insurance policies allow you to visit any doctor or specialist you decide upon, though the majority of plans require a pre-certification from your insurance company prior to hospitalization (this excludes emergency treatment). If you do not have pre-certification, you risk not getting reimbursed for hospital expenses.
Temporary insurance usually includes the following under its basic coverage for medical services:
- Hospital treatment
- Surgical procedures
- Emergency care
- Diagnostic tests
- Prescription medications
- Certain treatments for mental health
- Doctor’s office visits
It is possible to renew a short term plan for a total of 36 months if you have not filed a claim while receiving short-term benefits. If a claim is filed, the insurance company will most likely not renew your plan. Most established insurance companies offer a 30 day satisfaction guarantee and will refund you 100% of your premium cost if you decide you do not want the plan. Also, no claims must be made in order to receive the refund.