Short-Term Health Insurance Can Bridge the Gap

Posted by on in Life Transitions

Please note, our Short Term Medical insurance is intended for temporary gaps in health insurance.  It is not compliant with the federal Affordable Care Act and does not cover expenses related to pre-existing conditions.

Thanks to the Affordable Care Act (ACA), otherwise known as ObamaCare, interest in short-term health insurance has spiked significantly.

According to health insurance exchange eHealth, there was a 134 percent jump in applications for short-term health insurance between 2013 and 2014, when many ACA rules took effect.

Obtaining short-term, or temporary, health insurance doesn't mean you can avoid ACA fees for not holding long-term coverage. Short-term health insurance does not fulfill all ACA requirements, which is why a government fine will be issued to people who only have short-term coverage throughout the year.

However, short-term health insurance can be an inexpensive, smart alternative for people who are between coverage plans (due to a job loss, for instance), have missed an open enrollment period, or want to fill gaps in their long-term policy start dates. Short-term coverage can last up to 11 months. Going without health insurance for even a short period can jeopardize your finances.

Furthermore, a lack of health insurance might deter you from seeking any medical care at all.

Short Term Plans

If you need health insurance outside open enrollment and haven't experienced a qualifying life event, such as getting married or having a baby, short-term health insurance is often your best option. A short-term medical policy from HCC Life, for example, has simplified underwriting, no application fees, no out-of-network penalties and low copays at urgent care centers. Plus, you'll find out right away if you're approved.

One of the key advantages of short-term insurance is the cost. According to eHealth, the average monthly premium for individual major medical plans chosen during the 2015 open enrollment period was $286. By comparison, the average premium for individual short-term plans selected in 2014 was $110.

Of course, the lower cost comes with a trade-off. Short-term health insurance doesn't provide the array of benefits you'd get through a major medical plan. Many short-term policies will not cover routine office visits, maternity care, chronic illnesses or pre-existing conditions, and prescription drug coverage might not be an option. Rather, short-term health insurance is designed to safeguard someone in case of a medical crisis, such as an accident or unexpected illness.

Short-term plans cover services such as doctor's visits, surgeries, inpatient care and outpatient care. A survey by eHealth indicates that 89 percent of policyholders who had used their short-term coverage said they still were able to see the doctors they wanted to see.

Obtaining Coverage

If you're healthy, qualifying for short-term coverage can be a fast, simple process. However, if you're coping with pre-existing health issues or you need ongoing medical care covered by ACA-compliant plans, short-term medical plans are not the best option. Unlike plans regulated by ACA, short-term plans aren't required to cover pre-existing conditions.

Short-term plans also cap the amount of benefits you receive and usually do not provide the ability to renew the coverage. However, when short-term coverage from one insurer ends, a consumer can seek coverage from another insurer.

Aside from the relative ease of obtaining short-term health insurance, another benefit is that the coverage can kick in within 24 hours of signing up. Furthermore, most insurers offering short-term policies will typically allow you to pay for the insurance all at once or on a monthly basis.

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