With so many different options for health insurance, it can be difficult to select the right policy to suit your needs. Considering that American health insurance legal standards (like the Affordable Care Act and the more recent executive order on Improving Price and Quality Transparency in American Healthcare) seem to change all the time, it can make decisions pertaining to healthcare coverage even more murky.
Luckily, things dont have to be as confusing as many consumers think. There is an array of health insurance options available today that can offer both limited and more comprehensive coverage, according to policy holders individual needs. With a partner like VisitorsCoverage on your side, you can see your options and get the details you need to make the best choice.
One of the choices to make involves short-term health insurance, also called temporary health insurance. Let's take a closer look at what a short-term health insurance policy is, what it covers and the situations in which this kind of coverage can come in handy.What is short-term health insurance and how does it work?
Much like the name suggests, a short-term health insurance plan provides limited health coverage for a prescribed period of time. Depending on the policy chosen, coverage can last from just a few weeks to up to a year.
Overall, these plans typically have a maximum coverage amount of $2 million, with certain limitations on benefits compared to more comprehensive, full-coverage plans. Because short-term policies are meant to bridge a gap in medical insurance coverage, these plans are typically less expensive, but don't provide as many benefits as other insurance options.
For example, a short-term policy is an ideal option for someone who is changing jobs and is without their regular medical coverage for a defined period of time. We'll get into additional examples later, but these policies can provide the support people need until a more comprehensive or employer-sponsored plan begins.What is covered under a short-term health insurance policy?
Actual benefits and coverage exclusions or limitations will depend on the plan you select and the insurance provider you work with. However, it's important to understand that a short-term policy is designed to be temporary and is not the same as regular medical insurance coverage.
- Coverage: This will depend on the policy, but many plans pay a specified percentage (usually 50-80%) of out-of-pocket medical costs until the maximum coverage amount is reached, at which point coverage percentage typically increases to 100%. Other plans, though, may only provide coverage for defined critical illnesses, hospital stays and/or surgery, as specified in the policy.
Coverage may also be limited or unavailable in certain states. Currently, due to local state regulations or other factors, short-term health insurance plans are not offered in California, New Jersey, New York, Rhode Island, Washington and other states, depending upon the plan you choose and the provider you work with. Check out our plans here to learn more.
- Not renewable: Because these policies are only meant to be temporary, once the coverage period ends, policyholders cannot renew their plan. They can enroll in another short-term policy, but usually individuals can only have coverage through two short-term policies within a single year.
- No coverage of pre-existing conditions: This is one of the key areas of limitations regarding coverage provided by short-term policies. Whereas traditional medical insurance will often cover pre-existing conditions, a short-term policy does not offer this benefit. In other words, while accidents, injuries and other medical needs and emergencies are covered as part of essential health benefits, pre-existing conditions or health issues related to these conditions are not part of short-term insurance plans. In addition, many plans also limit or do not provide coverage for preventative care services, pregnancy and maternity medical needs or mental health care.
Despite certain limits on health benefits, there are some key reasons to consider this insurance product:
- Prevent coverage lapse: This is one of the most common reasons to purchase a short-term health insurance plan. In some situations, individuals are left without insurance for a period of time. When this happens, these people are responsible for their out-of-pocket medical expenses, and these costs can become very high. Having a short-term health insurance plan helps provide coverage before a full-fledged, comprehensive insurance plan starts, and can support peace of mind for policyholders.
- Cost: Short-term health insurance plans provide essential coverage, often at a much less expensive price when compared to comprehensive health insurance. Premiums are typically more cost-efficient than other health insurance options, and ConsumerReports noted that some plans can cost as low as $40 or $50 per month. However, the actual premium price can vary depending on the plan and insurance provider.
- Flexibility: Coverage periods can range from one month to up to a year, and some providers offer plans for policyholders as young as 15 days old. In this way, you can ensure that your entire family has the short-term coverage they need.
- Streamlined application: Oftentimes, the application process for short-term plans is much shorter and easier than those for full-fledged medical insurance. With a partner like VisitorsCoverage, you can complete your application anytime online.
- Efficient start date: In addition to being flexible with coverage periods, these plans also allow coverage to go into effect much faster than a typical health insurance policy. Some providers enable coverage to begin the very next day after you apply, which can come in handy if you're left without medical insurance unexpectedly.
- See any doctor: Many short-term health insurance plans also come with the advantage of not having a providers network. This means policyholders can use their coverage to see any doctor or go to any hospital in their area.
Check out our website to learn more about the benefits of a temporary health insurance plan, and how these compare with regular insurance.Who should consider this type of plan?
A short-term health insurance plan can be especially useful in certain situations. If any of these sound familiar, you should look into a temporary insurance plan to help cover your medical needs in the interim:
- Changing jobs: Many people rely on their employer for medical insurance benefits, but if you're between jobs or have been laid off from your previous position, your employer-sponsored insurance is no longer in effect. Even for short transitions, a temporary health insurance plan can help ensure that you have the minimum essential coverage for your medical and health needs. For longer periods, there are also temporary plans lasting up to 12 months.
- Seasonal employees: In addition, if you hold a temporary or seasonal position with your employer, chances are good that they won't provide health insurance. In these situations, a short-term plan is a good option.
- Aging out of parents insurance coverage: Twenty-six is the magic number in the U.S. If you are nearing this age and still use your parents insurance for medical health coverage, it's time to consider other options. Once you turn 26, you'll lose eligibility for benefits as a dependent and you'll need your own insurance policy. If you can't afford a comprehensive plan yet or are waiting for an employer-sponsored plan to begin, a short-term health insurance policy is the perfect option to bridge the gap.
- Recent college graduates: A short-term health plan is also ideal for college or optional practice training (OPT) students preparing to graduate. While you may have student insurance, these benefits cease once you graduate. Before you get onto an employer health plan, you can leverage a short-term insurance policy to ensure you have coverage.
- Recent retirees: Individuals that retire before the age of 65 may find themselves in a similar position. Many employers don't extend the company's health insurance policy past the retirement date. In these situations, a temporary plan can provide coverage until you're eligible for Medicare.
- Recently divorced: If you've recently separated from your partner and their insurance coverage is no longer accessible, you can obtain a short-term plan until you're able to enroll with your employer or get other, more comprehensive coverage.
- Immigrants to the United States: If you lived outside of the U.S. previously and recently immigrated, a short-term policy can be a good option to ensure you have coverage until an employer plan or another type of sponsored insurance begins. With flexible options for coverage and starting dates, you can get temporary insurance to suit your medical health needs.
- Citizens returning to the U.S.: Similarly, if you are a United States citizen, but you've been living abroad for an extended period, you'll need to ensure you have coverage when you return to the states. Thanks to the streamlined application process and flexible coverage starting date, you can get a temporary policy as soon as you return.
- Missed special enrollment or open enrollment periods: A short-term plan is also beneficial if you missed the open enrollment period for your employer-sponsored insurance or the Affordable Care Act policies. In other cases, you may have had a qualifying life event (such as turning 26, getting married, etc.) but missed your opportunity to enroll with your employer. Until the next open enrollment or special enrollment period, your short-term health insurance can ensure you have coverage for major medical expenses.
It's important to carry continuous health insurance, in case any injuries or medical emergencies arise. However, as stated above, there are situations in which people may find themselves without regular medical insurance coverage. Nearly any situation in which you find yourself temporarily uninsured is a good time to consider a temporary health insurance plan.
To find out more about the advantages of a short-term health insurance plan, as well as your available coverage options, connect with us at VisitorsCoverage today.