How to Get the Best Short Term Insurance

May 17, 2019

Short term health insurance is designed for people who are exempt from the mandate to buy regular insurance and are simply between coverage options. It is also intended for people who are looking for health insurance options outside of open enrollment. Although short term insurance can’t fend off a medical catastrophe, it can protect the insured from facing a financial disaster if tragedy strikes.

Remember, short term insurance only covers some of your health care needs or costs but doesn’t exempt you from paying the monthly fee for not having insurance. In this in-depth guide, you’ll learn about the benefits of short term insurance as well as its pros and cons.  You’ll also get tips on how to get the best coverage to fit your needs.

 

Why You May Need Short Term Health Insurance

  • You need temporary coverage before you get Medicare benefits
  • You’re no longer a dependent covered under your parents’ insurance plan
  • You don’t qualify for Medicaid or Medicare, but you want coverage for you and your family
  • You’re a recent college graduate
  • You’re traveling outside of your network area
  • You’re waiting for your employer group insurance coverage to start
  • You’re in between jobs
  • You’re waiting for marketplace insurance coverage to start
  • You’re a seasonal employee
  • You have been laid-off or are involved in a labor strike

 

Advantages Of Short Term Insurance

Short term insurance plans typically offer decent cost coverage and a low premium in exchange for not having to follow the Affordable Care Act’s (ACA) set of rules.  The coverage will protect your finances and give you peace of mind in the event of unexpected medical emergencies until you purchase ACA-compliant health care. 

You will typically be approved within 24 hours of submitting your application.  Short term coverage can begin within 24 hours of approval.  The coverage option is perfect for bridging health insurance gaps in times of transition.

Whether or not a short term insurance policy is right for you depends on your budget and specific health insurance needs.  Not everybody wants to (or can afford to) follow the legal requirements of purchasing health insurance plans as laid out by the Affordable Care Act. Therefore, a wallet-friendly option of short term coverage for unexpected illnesses and accidents comes in handy.

 

Disadvantages Of Short Term Insurance

  • The coverage primarily serves as your catastrophic coverage
  • The policy doesn’t exempt you from tax penalties as it doesn’t satisfy the ACA requirements
  • The policies are intended for short periods, and your state’s laws dictate what is available
  • Your access to doctors is limited
  • The policy doesn’t cover maternity care and other benefits such as prescription drugs
  • Having short term health insurance may prevent you from accessing HIPPA or COBRA
  • Filing for a claim during the coverage period of your short term policy may result in higher premiums on your new coverage period
  • The medical condition in question may be excluded from your new policy
  • Unlike the ACA-qualified plans, short term insurance requires medical underwriting; you can be denied coverage depending on your current medical condition or health history
  • These policies are not renewable.  Thus, if you want to continue coverage, you need to go through the entire application process all over again upon expiration of your policy.

Short term insurance doesn’t typically cover preexisting conditions that have been diagnosed within the past two to five years. However, the definition of preexisting conditions may vary from state to state. In addition, it is important to remember that you might be denied payment or be dropped from the short term health coverage entirely if you try to get treatment for a condition that you didn’t disclose when purchasing your policy. This is not the case with ObamaCare-compliant major medical plans that comes with lots of benefits, rights, and protections.

 

How To Get The Best Short Term Insurance

As you vet the options, consider these important factors: 

A customizable plan.  Short term insurance is a temporary coverage that should supplement your traditional health insurance coverage, not substitute it. Therefore, it’s not prudent to solely rely on a short term insurance plan.

It is important to evaluate all your health insurance needs and start looking for a coverage option that meets those particular needs. This is critical as there is no one-size-fits-all short term plan that works perfectly for everyone.

In order to get affordable coverage that will give you good value for your money, you need to choose a plan that allows you to select the length of plan, deductible, co-insurance, etc. While bare-bones plans that have been stripped down may not be a perfect choice, short term plans with too many features may be unnecessarily expensive. In other words, choose a flexible, short term plan that is cost-effective for you and your family.

You should avoid short term plans that promise customers a false sense of security. Such products can land you in hot water. For example, a fixed indemnity plan without a catastrophic cap may only cover a hospital stay, which is not enough for covering a serious emergency.

Access to providers.
Being unable to see or speak with your doctor of choice can be very frustrating. Read the policy carefully to ensure that your regular doctor is covered by the temporary plan before you invest.

A short term plan that covers a wide range of doctors who offer emergency services in your geographical area will markedly reduce your out-of-pocket emergency fees. A more-established insurance company with a large network of physicians is more beneficial than a cheaper option with a small network of doctors.

Proven history. Insurance companies have their unique in-house policies in regards to how they handle their customers and package their insurance products. Look for an established insurance company with a proven track record for effectively handling its customers’ requests and claims. Customer reviews count here. Avoid insurance companies that have questionable reviews in terms of following through on their customers’ requests and claims.

Rating agencies score insurance companies based on their background and performance.  A credible insurance company should score a “B” or better in these rankings.  In addition, reputable insurance companies should publish public documents regarding their organizational policies, history, and financial stability.  This guarantees greater transparency. 

The Bottom Line?

Your decision to purchase short term health insurance (or not) depends on your specific situation and future plans. For instance, if you have missed open enrollment, you can consider short term insurance to protect yourself financially until you’re eligible for other long-term health insurance plans. It is crucial to weigh all your options carefully, consider the pros and cons, and make an objective decision based on the facts and your personal needs. 

 

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