You know you need health insurance, but there may be a time when you’re suddenly uninsured. So what happens if you suddenly find yourself without coverage? Naturally, you’ll want to look for a short-term health plan.
But beware – even though short-term plans can only be used temporarily, you shouldn’t make your selection lightly. Just because you don’t intend to use a plan for very long, that doesn’t mean choosing any short-term insurance is in your best interest.
In fact, choosing a “junk plan” can affect your ability to seek care or be more costly than you expect. A few simple guidelines can help you separate the best short-term plans from the not-so-great ones.
Five Red Flags for Short-Term Health Insurance
When selecting short-term insurance, knowing what to avoid is nearly as important as knowing what you need. So, what are the dangers and warning signs you should look out for? Here are five red flags that may indicate junk plans you should skip over.
1. Avoid plans that aren’t upfront about the risks
In addition to letting you know costs and included coverage, any insurance you choose should let you know what you’re not getting with your plan. Depending on the plan you choose, a lot can be left out.You may not need a wide range of medical care, but you will want to know in advance what your #shorttermplan covers. Click To Tweet
It’s important to note that short-term health insurance plans are not qualified health plans under the Affordable Care Act. Short-term plans will rarely cover pre-existing conditions, and they shouldn’t pretend to provide you with the equivalent medical services as Affordable Care Act plans. In particular, prenatal health care, rehabilitation centers, and prescription drugs are usually excluded from short-term policies.
2. Avoid insurance companies with a bad or scammy online reputation
If a plan seems too good to be true, it probably is. Crowdsourced user reviews are a reliable way to get a feel for how a short-term provider operates.
If member reviews are consistently negative or low-scoring, it’s probably in your best interest to opt for a different plan from a provider with a more positive reputation.
3. Be careful around plans that cover very little
Many people primarily consider cost when selecting their insurance plan, but it’s very important to look at the fine print when you’re choosing coverage. Some plans have more restrictions than others.
In addition to services not covered, some plans may have waiting periods for care, disallow hospitalizations on the weekend, or limit coverage and treatment for common injuries or medical problems. These restrictions are not typical, which is why you’ll want to read the fine print.
Simply should take the time to find out what’s actually covered when you choose your plan – especially if you have specific health needs or can’t afford hefty financial responsibility in the event you need unexpected medical care.
4. Avoid plans that don’t fit your financial needs
Since short-term health insurance plans aren’t required to be ACA-compliant, they aren’t held to the same financial regulations as long-term major medical coverage. This means short-term plans don’t have to cap out-of-pocket costs.
You could benefit from lower monthly premiums, but at the risk of very high deductibles and limits on benefits.
In fact, some plans have out-of-pocket maximums reaching skyward of $20,000 during a mere three months of coverage.
So if you need more or unplanned medical care while you have short-term coverage, you could be paying a lot more than you expect.
5. Watch out for plans that are new or not backed by a major insurance company
Because short-term insurance companies are not as well known, questionable companies and plans can exist. This means that you as a consumer need to be cautious when choosing your plan.
While some newer plans may be legitimate, they may not have an extensive network or provide as much coverage as a major insurance company. But the bigger concern is selecting a fraudulent plan, or a junk plan that may be out of business tomorrow. These bogus plans cause confusion in the healthcare system.
Some short-term companies without significant assets deliver worthless plans or stripped-down policies, that have members paying for most of their medical bills themselves.
The best way to avoid scam policies is to get your insurance through a trusted broker or major insurance company. One short-term provider we trust is our subsidiary, Pivot Health, which has a long track record of financial backing from a larger insurer.
Final Tips for Choosing a Safe Short-Term Plan
Good short-term health insurance (also known as temporary health insurance or short-term medical) is exactly what it sounds like: insurance intended to provide coverage for a brief amount of time.
These plans are a great way to temporarily protect yourself from unforeseen medical expenses. However, if you find yourself in the market for short-term healthcare, be careful to fully understand what you will and won’t be getting in your plan. They won’t provide the same coverage as an Affordable Care Act plan and should not be treated as a substitute for having major medical insurance.
And, just like any insurance, not all plans are created equal. So it’s important to carefully assess your life situation before deciding on the plan that’s right for you. The right short-term policy can protect your pocketbook without compromising the care you need.
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