If you’ve lost your Affordable Care Act (ACA)-qualifying coverage, for example, as a result of being laid off from your job or losing your spouse’s coverage as a result of divorce, you might be tempted to go uninsured temporarily to save some money.
But if you need healthcare in the meantime, you could wind up paying for it 100% out of pocket.
That’s where short term health insurance (also referred to as “temporary” health insurance and “short term medical”) may be a good alternative to going without coverage.
Not sure what short term health insurance is? Review the article, “What is Short Term Health Insurance and What Does it Cover?”
In the remainder of this article, we’ll talk about why you may want to enroll in a short term health plan and how to know if temporary coverage may be right for you.
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Why Buy Temporary Health Coverage?
Short term health coverage is not right for every person or every situation. Below, we’ll talk specifically about some of the features of short term medical plans.
For a more complete comparison of the benefits and drawbacks of short term health plans, check out the article, “Is Short Term Health Insurance a Good Idea? Advantages and Disadvantages.”
What short term health insurance may provide:
1. Access to Medical Benefits
Short term policies can help pay for unexpected healthcare when you need covered services for an illness or injury. After you meet your annual deductible amount, your benefits will help with covered expenses.
When you’re in between major medical plans, you might be looking to save money. And, generally speaking, short term premiums tend to cost less than unsubsidized major medical premiums because the policies are much less robust and are not guaranteed-issue. For example, they don’t include essential health benefits or pre existing conditions coverage.
3. Flexibility and Freedom
Short term coverage is typically available year-round though availability and duration limits vary by state. There isn’t a singular open enrollment period, which means you can apply anytime (applications are subject to carrier approval).
Healthcare providers may accept temporary health insurance as they do major medical. It’s also possible that you can choose your preferred doctors and hospitals because not all short term health plans require you to visit network providers.
Furthermore, some short term medical plans have optional networks with access to discounts when you see a provider who belongs to the network. Read plan details to determine what, if any, network restrictions may apply to the coverage you choose.
4. Custom Coverage
Temporary health plans can last anywhere from 30 to 364 days depending on your state. You can also choose from a range of deductible options that help you strike the right balance between premium cost and out-of-pocket affordability.
You may also be able to customize your coverage with optional additional benefits (which typically result in higher premium).
5. Same-Day Enrollment, if You Qualify
Short term policies can be obtained quickly after you qualify. As mentioned earlier, they are typically available year-round.
You can apply and enroll online 24 hours a day, within just a few minutes by filling out an application and answering a brief health questionnaire. If your application is accepted, you can choose to begin coverage as early as the next day. Remember, most short term policies do not cover pre existing conditions.
Compare short term insurance policies, coverage, and costs. It just takes a minute to get quotes.
Who is Short Term Medical for – is it Right for You?
Short term medical insurance can be helpful for many people, but it’s not necessarily a fit for everyone. Here are three primary things to keep in mind when considering short term medical.
Your Life Stage and Circumstances
Temporary coverage could be a good option if you:
- Are waiting for your employer-provided benefits to kick in
- Missed open enrollment
- Are not eligible for special enrollment and need limited-benefit coverage
- Are between jobs and either don’t have access to COBRA or can’t afford it
- Have a short coverage gap between retirement and Medicare eligibility
Remember, short term medical provides an alternative to going without any coverage, but as we’ve previously discussed, it is not a stand-in for an ACA-qualifying major medical plan because of the limited nature of the benefits.
In addition to these specific life circumstances, you must weigh your personal healthcare needs and budget.
Your Healthcare Needs
Some questions to ask yourself about your healthcare needs include:
How long will you need coverage? Currently, short term policies can last from 30 to 364 days depending on your state. If you need coverage for more than a few months, you may want to consider a more robust ACA major medical plan.
Do you have pre existing conditions? Most temporary health plans do not cover pre existing conditions. You will be required to answer some health questions when applying for short term coverage, and your answers could impact your eligibility. If you have pre existing conditions then a guaranteed-issue ACA plan is a better option for meeting your healthcare needs.
What kind of healthcare services do you typically need? Short term plans tend to be most suited to help with unexpected medical costs that might result from an accidental injury such as a broken arm, or illness, like pneumonia. If you tend to use preventive care, have a prescription drug you need coverage for, or have an upcoming procedure, such as surgery, scheduled, short term medical likely won’t be a good fit.
While short term health plans tend to have lower premiums than unsubsidized ACA plans, it’s because of benefit limitations and exclusions – so the “savings” doesn’t come without a potentially significant cost tradeoff when obtaining healthcare services.
That’s why taking your healthcare needs into account is important when thinking about costs.
Are you eligible for an ACA subsidy? If you qualify for premium tax credits and/or cost-sharing reductions to help reduce your monthly health insurance payments and covered out-of-pocket expenses, you may want to apply for an ACA plan from the Marketplace.
Short term health insurance is not eligible for subsidies. Learn more about income levels to qualify for subsidies and find out if you are eligible for an ACA subsidy.
You can find out how much a short term health insurance plan could cost you by getting a quick quote.
For a much more detailed look at how to choose health insurance, check out our complete guide.
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Summary and Next Steps
In this article, we discussed some of the features of short term health insurance and what questions to ask to determine if it may be a good option for you.
While short term medical coverage may be a good option for many, it’s not the right fit for everyone, especially if you qualify for an ACA special enrollment period, ACA subsidies, Medicaid or CHIP, or have pre existing health conditions.
Next, learn about how to find the best short term health insurance plan for you. Or, speak to an insurance agent for more information; call 888-855-6837 for individual help.
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