Choosing the Right Short Term Medical Insurance Coverage

Maintaining continuous health insurance coverage has been linked to staying on top of needed care, preventative care and prescriptions. But choosing medical insurance can be intimidating.

Uncertainty is understandable when there are so many plan options. Make sure you find coverage you can trust. Research your options thoroughly and discuss them with a licensed insurance agent in order to make an informed decision. This guide explains the main types of coverage available.

Individual and Family

When you don’t have access to major medical insurance through an employer, association or another group, you can purchase affordable health insurance on an individual or family basis.

The major difference between group and individual health insurance involves evidence of insurability. To obtain individual insurance, a person must generally answer a health questionnaire and undergo a medical examination to provide evidence of insurability to the insurance company. An insurer may decline coverage on the basis of the applicant’s personal health, medical history, age, health habits, income or any other factors that bear on risk acceptance. Or the insurer may issue a policy with limitations on coverage.

Critical Illness

Critical illnesses can devastate more than your health; they can strain your finances. Critical illness insurance helps ease the burden by paying a lump sum benefit upon diagnosis of covered critical illnesses such as life-threatening cancer or kidney failure. Most plans cover six to 12 different critical conditions, which may include life-threatening cancer or kidney failure. Most plans cover six to 12 different critical conditions, which may include life-threatening cancer, kidney failure, heart attack, stroke, coma, cancer in situ, major organ transplant and severe burn.

Critical illness health insurance helps with related expenses beyond doctor and hospital bills, including childcare, travel and lodging. It can even help pay for experimental treatments, copays and deductibles, and providers your medical insurance doesn’t cover. This coverage is not comprehensive, however, and serves as a supplement to a major medical plan.

Short-term Medical Insurance

Short-term medical plans offer a quick, temporary solution when a life transition leaves you uninsured. These plans are easy to enroll for and usually involve answering a few health questions online. Approval takes place within minutes, and coverage begins as early as the next day.

STM coverage usually lasts for as few as 30 days or as many as 12 months. Policies are typically offered with a selection of premiums and deductibles. They are often advertised to be as much as 35 percent less than typically privately purchased plans.

STM plans offer a safeguard from unexpected major medical expenses during a gap in coverage. They usually cover a range of physician services, surgery, outpatient and inpatient care. In addition, policyholders can often choose their own doctor and hospital without restrictions, although there may be financial incentives for using in-network providers. Plans typically will not cover routine office visits, preventative care or preexisting conditions, so be sure to check the policy's list of exclusions.

These plans tend to be a good fit for healthy people who need short-term medical coverage — recent college grads, recent divorcees, those between coverage due to job loss, or those waiting for coverage to begin under a new employer. STM plans are not meant to be a long-term insurance solution.

Get a free online quote on a short-term medical plan.

Limited Benefit Medical

Limited benefit medical insurance plans can help fill the gap for those without major medical coverage. In general, they are suitable for those considered “uninsurable” due to preexisting conditions; those who can’t afford major medical insurance but need basic, non-catastrophic coverage; those who seek inexpensive, creditable coverage between jobs and those who have exhausted their 18-month COBRA benefits and have no other options.

Limited benefit medical plans pay stated benefit amounts. Guaranteed issue, simple and straightforward, they do not involve underwriting or health questions. While they are not designed for catastrophic coverage, limited benefit medical plans provide first-dollar benefits for physician office visits, preventative care, diagnostic work, emergency room visits and more.

Because of their limited nature, these plans are not right for everyone. They are not an alternative for those who qualify for major medical coverage.

Dental Insurance

Dental insurance coverage is fairly new to employee benefit plans. Until the 1970s, when dental costs began increasing, dental care was considered an expense families could pay for out of pocket and was left out of benefits packages. Today, some employee benefits plans include dental coverage as part of their medical plan, while others include dental coverage as a separate plan. Regardless, many health insurance plans provide coverage for non-cosmetic dental work necessary as the result of an accident. Some plans even include limited coverage for hospital room and board expenses related to dental procedures, such as removal of impacted wisdom teeth, performed in a hospital.

Dental services are generally divided into different coverage levels, and most plans cover at least diagnostic care including semiannual examinations, semiannual cleaning, X-rays and diagnosis. To promote preventative care, these “Level 1” services are often covered at higher reimbursement levels than “Level II” (basic services including fillings, crowns, jackets, crown repairs, extractions, root canals) and “Level III” services (major services including bridges, replacement bridges and dentures).

Vision

Most health insurance plans provide coverage for medical care related to eye injury or disease, but do not cover the costs of periodic eye examinations or corrective lenses. Like dental care, vision care is a relatively new employee benefit, offered by employers that can afford to expand their employee benefits plans to include additional fringe benefits previously considered part of a household budget.

Vision care is most often covered on a scheduled basis that pays a fixed dollar amount for examinations, lenses and frames. Vision care is almost universally noncontributory due to the potential for biased selection.

Life Insurance

In the event of your death, life insurance pays a death benefit that helps care for your dependents. Choose a plan that suits your budget and your needs, and then feel the peace of mind that comes with knowing your family is taken care of should the worst occur.

Things to consider as you shop around

Premiums

What will you pay just to have coverage?

Coverage/benefits

How long do you need coverage? What do you use coverage for? What services does the plan include? How are benefits paid; do you have to submit a claim?

Access

Will you be able to choose your own doctors, hospitals and other providers, or is there a network of providers you must choose from? If there is a network, are the providers accessible to you? Will you have access to after hours and emergency care?

Out-of-pocket costs

What will you pay for coinsurance, copays and deductibles? Are prescription drugs covered?

Exclusions and limitations

Are things like preexisting conditions and pregnancy excluded? Are certain professions excluded? Does the coverage last for a limited time?