Health Insurance 101: What Is Short-Term Insurance? 

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Over the last year, the number of Americans who don’t have health insurance has risen by a significant margin.

In 2017, 7.9 percent of Americans were uninsured. In 2018, that number went up to 8.5 percent, and it’s likely to increase in 2019 as well.

Are you currently without health insurance? Has anyone ever suggested short-term health insurance to you?

If you have questions, such as “What is short-term insurance?” and “Is it a good option for me?”, keep reading. Explained below is everything you need to know about this type of insurance before you make a decision.

What Is Short-Term Insurance?

As the name suggests, short-term health insurance is a type of insurance that provides you with some coverage for a short period of time.

In general, policies last a few months to up to a year (well, 364 days, to be exact).

These policies are good options for people who are unemployed and need coverage until they find a new job. They can also work well for those who are waiting for their new coverage to kick in after starting a new position.

They can also benefit those who are waiting to find out if they qualify for government assistance, as well as those who simply cannot afford another type of healthcare coverage.

Short-Term Insurance Pros and Cons

There are some definite benefits to short-term health insurance, but there are downsides as well.

Before you decide to purchase a short-term policy, make sure you have a thorough understanding of these benefits and drawbacks:

Pros

Short-term health insurance is more affordable than a lot of other types of insurance policies.

If you’re someone who does not fall below the poverty line but doesn’t make enough to pay for a non-subsidized insurance plan, the option to pay for a short term policy can be a godsend. 

These policies are also very flexible, so they’re great for people who only need coverage for a limited time.

If you know that you’re going to have a more comprehensive policy in a month or so but don’t want to go totally uncovered until then, you can choose a short-term policy that gives you peace of mind but doesn’t break the bank.

With a short-term health insurance policy, you also don’t have to worry about waiting for the open enrollment period. You can sign up for these policies at any time.

In most cases, they take effect right away, too. As soon as your application has been processed, you have coverage. 

Cons

On the other hand, short-term policies are often limited in terms of what they cover.

Many policies do not provide coverage for certain types of care, such as substance abuse treatment, mental health care, or maternity care. Because short-term policies are not compliant with the Affordable Care Act, they do not have to cover everything that ACA policies cover.

You might not be able to stick with your same doctor when you switch to a short term insurance plan, either. If they’re not part of that plan’s network, you’ll either have to pay higher costs to continue seeing them, or you’ll have to find a new care provider.

This might not be a big deal for people who don’t have a primary care physician already. For those who do, though, it can be a bit of a letdown, especially if none of the in-network doctors are close to them or fit their specific needs. 

Tips for Choosing Short-Term Insurance

Do the pros of short-term health insurance outweigh the cons for you?

If so, you might be interested in purchasing a policy of your own.

Before you begin shopping, be sure to keep these tips in mind. They’ll help you find the best medical plan that is affordable and provides you with the greatest amount of coverage:

Learn Your State’s Rules

Start by making sure your state even allows short-term insurance policies.

A handful of states (including Massachusetts, New Jersey, New York, Hawaii, and California) don’t allow the sale of these policies. Other states have strict limits on them. For example, in Colorado, you can only buy policies that last for six months.

Find out what the rules are in your state before you start shopping. 

Consider the Cost

Of course, the price will play a significant role in your decision.

How much are you willing to spend on short-term coverage? Is there a plan that fits your budget?

Remember to look beyond premiums, too. How much will your out-of-pocket costs be? What will you have to pay for things like prescription drugs?

Consider the Coverage

Think about the extent of the coverage that each plan offers, too.

Do they provide coverage for services you or your family members need?

Think About the Term Length

Consider the term length you need for your policy, too.

Do you just need coverage for a month or so, or will you need a longer-term length while you search for a new job? 

Research In-Network Providers

When you’ve found a policy that seems like a good fit for you, research the providers that are included in its network.

Find out where their offices are located and what their patients have to say about them.

This can help you determine whether or not the plan is truly a good fit for you and your family.

Is Short-Term Insurance Right for You?

Now that you have a clear answer to the question, “what is short-term insurance?”, does it seem like a good option for you and your family?

Be sure to keep the information, especially the pros and cons, listed above in mind as you begin shopping for health insurance. If you remember these guidelines, it’ll be much easier for you to find a plan that makes sense for your specific needs.

Want to learn more about health insurance and health insurance options? Give some of the other insurance articles on our site a read today.

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