Top Facts About Short Term Health Insurance

Category: Short Term Originally Posted: December 11, 2014 by Staff Last modified: April 13, 2015

What is short term health insurance?

Short term health insurance offers protection from medical bills resulting from an unexpected event, like an accident or illness. Policies are typically for a limited period of time, usually between 30 and 364 days. They are most popular with individuals who are uninsured, between jobs, newly divorced or those waiting for coverage to begin under an employer’s plan. Short term insurance plans are also great for individuals and families who have signed up for an Obamacare plan, but have no coverage until the start date their health insurance is effective.

Also known as temporary health insurance or short term medical, this type of health insurance often has a high deductible, and because it is not permanent coverage, short term health insurance offers low monthly premiums – about half the cost of permanent, major medical health insurance. Many plans require you to pay for medical appointments, laboratory services, prescription drugs and other medical bills up to the deductible amount. If and when you reach the deductible, the insurance company pays a percentage of the additional covered medical expenses. The percentage paid by your insurance company varies by plan.

How fast can I get short term insurance coverage?

Applying for short term insurance takes 3-10 minutes, depending on how fast you type! If your application and payment are accepted, you can be insured as quickly as 24-hours later, or choose a start date within the following 30 days.

Is this type of insurance widely accepted by health care providers?

Nearly all doctors accept short-term insurance plans. Some plans have preferred provider networks (PPO), and you could be responsible for more of the costs if you get health services outside the network.

Why is it so affordable?

The cost of short term insurance plans is often about half of cost of a permanent major medical health insurance plan. It’s more affordable because it’s temporary insurance, and typically the plans offers higher deductibles to lower the monthly cost. But be sure to select a deductible you can afford to pay.

So What is a deductible?

A deductible is the amount you have to pay out of your own pocket before your health insurance company will begin paying your medical bills. For example, if you have a $1,000 deductible and are in a car accident that results in coverage medical expenses totaling $2,125, you will pay the first $1,000, and your insurance company would pay the remaining $1,125 of the bill. (This depends on your plan. There could be other charges you insurance company would require you to pay a percentage of as well.

Am I a good candidate for short term coverage?

Short-term health insurance is for anyone who doesn’t have health insurance, and needs an immediate option to get insured until a more permanent solution is available. Individuals and families who enroll in an Obamacare plan, but have to wait 30 days before coverage starts are excellent candidates for short term insurance. If you are unemployed, a new college graduate who lost coverage, if you can’t afford COBRA, if you got a new job and are waiting for coverage with a group health plan to begin, if you retire before the age of 65 and don’t qualify for Medicare or if you experience a divorce, short term health insurance is an affordable option for you.

I have a pre-existing condition. Can I still get short term insurance coverage?

Unfortunately, no. Insurers can deny coverage for a short term plan if you have a known medical condition. It is not a guaranteed issue product. The Affordable Care Act (also known as Obamacare) requires insurance companies to sell health coverage to everyone, regardless of pre-existing medical conditions. However, that requirement does not apply to short term health insurance. If you have a pre-existing condition, an individual plan from your state or the federal exchange will be your best option.

Can I renew my short term health plan?

Once your coverage period expires, a short term policy is void. However, you may be allowed to apply for a second short term policy.

Will short term insurance protect me from the tax penalty?

The Affordable Care Act (also known as Obamacare) requires individuals to have qualifying health insurance coverage. Short term policies do not qualify under Obamacare regulations standards, so enrollees could face a tax penalty for being uninsured or underinsured. The law allows people to be uninsured for up to three months without penalty.

What if I acquire major medical health insurance while I’m insured under a short term plan?

After you receive written confirmation that you’ll be covered under an individual major medical policy, in most cases you can contact your short-term insurance company and cancel your plan.