Short term medical insurance, also called temporary health insurance, is designed to provide coverage for major hospital, medical, and surgical expenses incurred as a result of medically necessary care for a covered illness or injury. Coverage is provided for daily hospital room and board, miscellaneous hospital services, surgical services, anesthesia services, in-hospital services, and out-of-hospital care, subject to any deductibles or rate of payment provisions or other limitations which may be set forth in the policy.
Unlike standard health insurance, these temporary short term health insurance policies always have a termination date. The expiration date of coverage is determined by the length of coverage you choose to purchase at the time of applying. Some temporary health plans allow you to choose a monthly billing option for the specified length of coverage. This option allows you to terminate coverage voluntarily before the expiration date disclosed on the policy.
Who would purchase Short Term Health Insurance?
This type of coverage is ideal for an individual that is in the middle of an insurance coverage gap. This gap is most commonly the result of switching jobs. Typically, when someone switches jobs, they are subject to the new employer’s probationary period before they are eligible for the new company’s group policy. By law, COBRA coverage is available from the previous employer up to a set time period determined by the state, but from a practical standpoint, that coverage may be unaffordable. Since you do not want to be left uninsured, a short term health insurance policy is the next best option. A recent college graduate is another example of someone who might benefit from a short term medical insurance plan to cover them after their student health insurance expires until they find a job that offers employer-sponsored coverage. Another example would be a person that is currently uninsured and is awaiting approval on a standard (permanent)health insurance plan. This would provide them at least some temporary insurance coverage in the event that they are declined by the company with whom they are applying with for a permanent policy. In most cases, once an individual has been declined coverage for a permanent policy, they lose their eligibility to obtain coverage through a short term health insurance plan. Therefore, these short term medical insurance plan solutions can act as a temporary “safety net” when this occurs.
Are Short Term Medical Insurance plans easy to get? Typically, yes, they are much easier to qualify for than a permanent health insurance plan. Eligibility is usually determined by answering just a few questions. Some commonly asked questions are:
- Do you currently have health coverage that is not due to expire prior to your requested effective date of short term coverage?
- Are you, or your spouse, currently pregnant?
- Have you been declined coverage for permanent health insurance due to health reasons?
- In the past few years, have you received treatment for heart problems, stroke, diabetes, cancer, blood disorders, diabetes, alcohol/drug dependency, or HIV/AIDS?
Answering yes to any of these questions may make you ineligible for coverage under a short term health insurance plan. Question #3 emphasizes the final example in the “who would purchase “section outlined above. If you are currently uninsured and shopping for health insurance, your first choice might be to obtain temporary health insurance coverage until you can find a permanent plan.
How quickly can I be covered by a Short Term Health Insurance plan? In most cases, you can be covered within 24 hours. Unlike permanent health insurance, short term health insurance plans do not require a lengthy “underwriting” process. Your eligibility is determined by answering only a few questions. The application for a permanent individual insurance policy is much more lengthy and detailed as to your health history. In addition, the insurance company thoroughly reviews a permanent policy application so that they may be certain the risk in providing you with health insurance is an acceptable one. If, on your application, you disclose health issues that cause concern, the insurance company may request medical records to better assist them in making a decision. This process can take several weeks at best and may result in a decline of coverage.
These are just some of the issues to consider when deciding if a temporary health policy is right for you. Since one of the major goals of health insurance is to provide long term financial stability and peace of mind, short-term policies should only be considered in certain circumstances. Due to the limited nature of the period of coverage and the ease of obtaining this type of insurance, special attention should be paid to short term medical insurance covered expenses and short term health insurance exclusions, because they differ from more permanent plans.