Short-term health insurance provides healthy individuals and families without health coverage with a safety net in case of emergencies. Most of these polices last between six months to a year, although the coverage period can be as short as 30 days, and can be renewed for as long as 36 months. Applying is simple and you can get your policies issued the day following approval. And, depending on the plan, you can enjoy individual coverage of as high as $5 million. However, this type of insurance does not cover pre-existing conditions, or health problems that were documented before you applied for health insurance; the look-back period varies according to your state’s laws. And if you’ve ever been denied coverage, you may not qualify for temporary insurance. Insurers also do not sell this type of insurance to applicants above 65 years old.
There are other drawbacks with this kind of health coverage. If you’ve made a claim, you will likely not be renewed under that particular policy and will have to re-apply for a new policy. Also, the illnesses or health problems you made the claim for in the old policy may be treated as a pre-existing condition and may result in you being denied renewal or a new policy. These policies also do not include dental or eye health coverage, as well as care for pregnancy and childbirth.
The advantages of taking out short-term insurance include: you can see any health provider you want; if you are hospitalized however, you need to get pre-certification from the insurer or they may not reimburse your hospital bills; premiums are relatively low as insurers expect that the insured will make few claims; and coverage can include your spouse and dependent children. Some plans may also cover preventive health services such as Pap smears, but not all of them do, so you have to read the terms of any policy you are applying for carefully.
One thing you should appreciate is that limited-term health plans will not cover the entire cost of your health expenses; there will still be a deductible, above which most insurers will pay some portion of the remaining costs. And if you can, pay your premiums up-front, since many insurers will provide you with a discount as an incentive for doing so.
Who should get short-term health insurance? If you’re between jobs, a recent college graduate still looking for employment or a temporary worker who is not eligible for coverage under your company’s existing health plan, a limited-term plan may be for you. If you’re a formerly dependent child who has reached the cut-off age and is not a full-time student, this type of temporary plan can ensure that you remain covered until you get health insurance. In short, if you are momentarily without health insurance for whatever reason, and in good health, a limited-term plan will ensure that you will be covered for emergency treatment if you need to be hospitalized and save you from out-of-pocket expenses that might otherwise wipe you out financially. It is the cheapest way of getting health coverage until you can get permanent health insurance.