3 Best Short-Term Insurance Providers

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When you decide to buy a short-term medical insurance policy, it's important to find a reliable carrier that can provide coverage that meets your personal needs.

The purpose of short-term medical insurance is to get you through gaps in coverage that may occur due to certain life circumstances, such as retirement or the loss of a full-time job. If you find yourself temporarily without insurance or waiting for your ACA-compliant coverage to take effect, a short-term policy may be the right solution for you.

How Does Short-Term Insurance Work?

According to insurance website healthedeals.com, a short-term medical (STM) policy will typically cover you for a duration of 30 to 364 days, depending on the healthcare laws in your state.

“Generally speaking, STM options tend to be less expensive than long-term individual health insurance options found in the ACA market,” says Mike Watts, Business Unit Director at HCC Medical Insurance Services, a full service insurance organization based out of Indianapolis. Be sure to note, however, that “this is due in part to their limited duration and the fact that STM plans do not cover pre-existing medical conditions or other comprehensive benefit options that are required by the ACA’s minimum essential care guidelines.”

Because these policies are not ACA-compliant, they should not be viewed as alternatives to long-term coverage- rather, a short-term policy complements ACA coverage by providing insurance throughout a coverage gap.

Short term coverage can be a good match for:                         

  • Individuals between jobs
  • New employees waiting for benefits to begin
  • Retired individuals (younger than 65) waiting for Medicare to begin
  • Recently divorced individuals and their dependents
  • Recent U.S. immigrants
  • Young adults no longer covered under their parents' plan
  • U.S. citizens returning from living abroad

When you shop for insurance, take the time to find out exactly what short-term medical plans do and do not cover (for example, most temporary policies do not cover pre-existing conditions).

Here are the top three short-term medical insurance providers:

1. HCC Life Insurance Company

hcc life tokio marine

HCC Life Insurance Company (HCC Life) is an Indiana-domiciled life insurance company with over 35 years of experience. The company has consistently held an A+ (Superior) rating for financial strength by A.M. Best Company as well as AA (Very Strong) ratings by Standard & Poor’s and Fitch Ratings.

HCC Life’s extensive product portfolio includes Short Term Medical (STM), a temporary health insurance option for people younger than 65 who find themselves or their families temporarily without long-term coverage. With this policy, you can choose your deductible, coinsurance contribution, and the length coverage.

In addition, a Short Term Medical policy needs limited medical underwriting with no additional medical tests required to be accepted for coverage. There is immediate online confirmation and no application fee. Policies are flexible, giving you the ability to choose doctors and hospitals without out-of-network penalties.

Other key benefits of an STM policy include hospital inpatient prescription drug coverage; coverage for outpatient surgery and hospitalization, including lab/x-ray and emergency room expenses; and the ability to seek care from a specialist without a referral (except for physical therapy).

STM is sold by HCC Medical Insurance Services (HCCMIS), a full service insurance organization rated “A+ (Superior)” by A.M. Best Company. HCCMIS offers a 10-day money back guarantee which allows you to send a written request to cancel your policy within 10 days of purchase. If you have not used your benefits, you will receive a full premium refund (premiums are non-refundable after 10 days).

2. The IHC Group

IHC Group short term insurance

The IHC Group has been providing life, health, disability, dental, vision, and medical stop-loss insurance to groups and individuals for more than three decades. Subsidiaries include highly rated insurance companies, managing general underwriters, third-party administrators and marketers.

IHC's Secure short-term medical policy offers monthly or single premium payments. If your need for coverage ends sooner than you anticipated, just send in a written notification. If you know how long you will need coverage, you can pay the entire premium up front for a discount.

The IHC's Secure Lite policy offers short-term coverage with affordable premiums that are achieved through benefit limitations.

3. UnitedHealthcare

UnitedHealthcare short term insurance

UnitedHealthcare is a division of UnitedHealth Group. With a workforce of about 185,000 people worldwide, it serves more than 125 countries.

The company offers short-term medical plans designed to get people through temporary situations. A short-term health insurance plan allows you to choose a policy of varying lengths, with a variety of deductibles and payment options.

If your insurance needs changed, you can drop this coverage without being penalized. Comprehensive medical overage can start as early as the day after your purchase, and policies allow you to see medical specialists without first getting referrals.

Bridging Gaps in Coverage

Be aware that short-term policies do not meet the federal government's requirement for ACA-compliant health insurance. A short-term plan may expose you to a penalty, to be paid when you complete your federal tax return, according to eHealth, an online insurance shopping website. However, you can avoid this fee by claiming a “short gap in coverage" exemption if you have a short-term policy (or go without ACA-compliant coverage) for no more than 2 consecutive months.

Laura Troyani, founder and chief editor of PlanBeyond, a website that helps people understand medical, financial and legal issues, says that short-term medical plans can be affordable solutions for people who must wait 30 to 90 days for their long-term coverage to take effect.

"It is great because it is cheaper," she says. "It can be a bridge."

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