Americans spend about $10,348 per person a year on healthcare. That’s double what people pay in other countries of the world.
It’s no wonder that medical expenses are one of the main reasons that Americans have debt. In fact, two-thirds of people who file for bankruptcy do it because of medical bills.
That’s one of the reasons why health insurance is vital. Even if you are between jobs or waiting for permanent benefits to kick in.
A short term health insurance plan will protect you and your family now. Read on to learn what you need to know to choose the right plan.
Contents
What Is Short Term Health Insurance?
Short term health insurance is also called temporary health insurance. These plans give coverage to those who don’t have coverage for various reasons.
In essence, traditional health insurance plans and short term ones serve the same function. They offset your out-of-pocket healthcare expenses.
Yet, these types of plans are designed differently.
Short term health insurance plan has a very specific coverage duration. It might range from 30 days to 364 days. It depends on what state you live in as well as what policy you choose.
Short term plans have a limited scope of coverage. Each provider is different so it’s important to read the fine print. These plans are designed to cover emergency illness and injuries.
With short term plans, you can be denied based on your health history. Also, most plans do not cover pre-existing conditions. Even if you didn’t know about a condition, you won’t get coverage if it appears that the condition was pre-existing.
Short term plans don’t qualify for ACA subsidies. Yet, they are generally less expensive than unsubsidized ACA plans.
Short term plans are also known for their flexibility. You can have a policy for as little as 30 days. Often, these policies are network-free so you can see whichever healthcare provider you prefer.
Who Needs Temporary Health Insurance Plans?
Short term medical insurance isn’t a guaranteed issue and offers fewer benefits. So why would anyone choose to pay for it?
People may opt for a temporary plan if they need coverage and are outside of open enrollment. It is also useful when a person is in between jobs. Or while you are waiting for your permanent benefits to kick in.
Basically, people choose short-term medical plans when they are uninsured and need affordable coverage. According to a recent health survey, 26% of short-term coverage customers were long-time uninsured. Another 29% had recently lost their insurance due to unemployment.
Buying short term health insurance may help people during a time of transition. Others simply prefer to continually have short term plans.
Now, let’s examine the most important considerations when choosing a policy.
What to Look for in a Short Term Health Insurance Plan
There are so many short term health insurance plans out there. It can be tricky to find the right one for your needs.
Here are a few of the top factors to keep in mind as you shop.
1Reputable Provider
Choosing a reputable insurance provider is a smart choice. Long-standing, trustworthy providers come with a large network of doctors and hospitals.
Sometimes, that means you get network discounts. When you do, that lowers the cost to you.
Well-established insurers usually have better rates than insurers with a small network of providers.
2Flexibility
By their very nature, temporary health insurance plans tend to be flexible. Yet, it’s still wise to look at the deductible options and coverage lengths.
Usually, a higher deductible means a lower premium.
You should also find out if you can cancel your plan without penalties. Your situation might change and you don’t want to be stuck with a plan you no longer need.
3Look For Your Preferred Providers
Many people prefer to see their own family doctor. Especially if you have years of history and records with that person.
If seeing your doctor is important to you, be sure that the clinic accepts the short-term plan you pick.
4Read the Fine Print
Also, be sure to read all the fine print. You want to know exactly what the plan does and doesn’t cover. Be sure to check the dollar cap on coverage. This lifetime benefit maximum is vital information for you to have.
Unfortunately, short term plans have more wiggle room to exclude conditions that would be illegal under the ACA.
Companies and brokers are highly motivated to sell these plans because there is usually a bigger commission payout attached.
Be wary of intense selling techniques when you are comparing brief health insurance plans.
Things to Avoid in Brief Health Insurance Plans
Now that you know what to look for when shopping for coverage, let’s look at what to avoid.
When shopping around, be wary of fixed indemnity plans. These are ones that pay you a set amount for each covered service.
These plans don’t have a deductible so it sounds like a great idea. But, the things it covers can be very limited. Also, there is no catastrophic cap.
Worse still, the fixed amount they offer will not cover the cost of serious health issues.
Stay away from mini-med plans if you can. These offer very limited protection with extravagant deductibles. The premiums are low but the deductibles can cost you thousands of dollars.
Be sure to think about the worst-case scenario as you compare coverage between different policies.
Choosing Temporary Health Insurance Plans
Choosing a short term health insurance plan can be tricky. Remember to ask questions, compare coverage and read the fine print.
Now, check out our other blog posts for the latest news and tips on business, lifestyle, health, and more.
