Short Term Health Insurance Frequently Asked Questions
Why is it so much easier to get Short Term Health Insurance?
The leniency of acceptance on a short term health plan is for several reasons. Primarily, the insurance company is not assuming a long term risk. With a permanent health insurance policy, the insurance company considers the possibility that you can stay on your policy until you are eligible for Medicare at age 65. They are not able to cancel your coverage, even if you contract a disabling or costly illness or disease. With a permanent health insurance policy, they must insure you for as long as you make your payments and assuming you did not commit fraud at the time of completing your application. Another reason why short term health insurance plans are easier to acquire is the fact that most of them do not cover treatment for pre-existing conditions. So, even if your pre-existing condition does not disqualify you from being eligible, you aren't likely to receive any benefits or compensation for treatment of this condition. For additional information on this subject, please review our article on common exclusions and limitations.
Are there any risks to consider when purchasing a Short Term Health Insurance plan?
The risk usually comes from purchasing a short term health insurance policy in lieu of a permanent insurance policy. When eligible for permanent health insurance, that option is always the safest option. You should feel most confident in purchasing temporary health insurance coverage when you are certain that a permanent health insurance plan will be available to you in the near future. This certainty usually occurs when you are in a probationary period with a new employer and you know the date that you will be eligible to be covered under their employer-sponsored group health plan. However, there are risks with this as well. What if you lose your new job prior to becoming eligible for enrollment on the group health plan? Or, what if you have a serious accident during this waiting period that forces you to leave your job for prolonged rehabilitation? You may think, Well, I will just get a permanent policy if that happens. That may be easier said than done. Remember, applying for a permanent health insurance plan requires a lengthy questionnaire and medical review. If you are currently being treated for an illness or injury, an individual permanent issue health plan may be impossible for you to obtain. If you are covered under a short term health insurance plan, your benefits for treatment of that illness will likely end when your policy expires.
Another important risk to consider is that in most cases it is not creditable coverage. Creditable coverage is important when transferring from one group health plan to another. Let's say that you lose your currently employment and choose not to accept the COBRA option available to you through that employer. Instead, you decide that short term medical insurance;policy is all that you need. You aren't concerned about paying for the cost of the medication you are currently taking. The COBRA payment is way too expensive, so you would be better off just paying for the medication yourself and purchasing a temporary health plan to cover the major and unforeseen medical expenses. This may sound like a logical decision, but it is important to understand what it means when your short term policy is not consideredcreditable coverage. In most states, you can't be excluded from coverage on an employer group health plan due to pre-existing conditions. However, your new group health plan can deny paying claims on a pre-existing condition for 6 months if you have had a gap of more than 60 days in creditable coverage. Having accepted your COBRA coverage or enrolled in a permanent issue individual health insurance plan would have prevented this lapse in creditable coverage.
What medical expenses are usually covered under a Short Term Health Insurance plan?
The level of coverage will vary from one short term health plan to another, but there are some features common to this type of coverage. Most of them will cover inpatient and outpatient physician visits, surgical procedures, lab and x-rays, hospital services, ambulance services, durable medical equipment, and prescription drugs. Covered benefits will vary depending on which short term health plan you purchase, so always review the plan benefits closely before making your purchase. For a more detailed explanation of covered benefits under a common temporary health insurance plan, please review our article on short term health insurance covered benefits.
Will the insurance company continue to pay benefits on any illness or injury that happens while I am covered under the short term health insurance plan even after my coverage expires?
This is a good question and not one that too many people consider asking. The answer: it depends on the short term health insurance plan that you purchase, but typically the answer is no. Once your insurance coverage expires, so does your eligibility to receive further benefits or claims from the insurance company. Some plans provide what they call extended hospital benefits in which they will continue to pay for your hospital stay if you are hospitalized on or before the day that your policy expires. However, once you leave the hospital your benefits will cease. Other short term health insurance plans may offer extended benefits for other injuries or illnesses that occurred while covered under the temporary plan. Always review the extended benefits clause of a short term health plan in detail prior to choosing which plan to purchase.
Where can I go to compare quotes and plan benefits from several short term health insurance plans available in my state?
For a list of companies offering temporary health insurance in your state, visit our Short Term Health Insurance page and click on your state.
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