Short-term health insurance is a quick and easy option, but it has limitations of which you should be clearly aware. The application process is typically limited to around 10 questions pertaining to existing medical conditions. If you answer “no” to these questions about specific health conditions, you will be issued coverage without further medical review of a request for medical records. Coverage can begin as soon as the day following the date of application. The minimum length of coverage is typically 30 days and the maximum length of coverage is 12 months. You can pay the premium monthly and may cancel coverage whenever you obtain a more permanent coverage. In addition, the premiums are usually less expensive than those of COBRA or individual health plans.
Many persons that might not be eligible based on the underwriting guidelines for individual health insurance may be qualified to enroll in a short-term plan. However, if an individual has applied for and been denied coverage through an individual health plan, they will most likely no longer qualify for this type of coverage either. In fact, one of the few questions on an application for short-term health insurance asks “Have you been denied other health insurance coverage in the past 12 months?” If you answer “Yes” to this question, your application will be rejected. If you are considering applying for individual health insurance, it might be wise to first secure coverage under a short-term medical policy to prevent this from occurring. Many companies that sell individual health insurance will also offer short-term policies and will coordinate the end date of one with the start date of the other. In some cases, you may be able to extend coverage under a short-term plan if you had no claims under your initial medical plan and there has been no change in your health status.
On the surface, short-term health insurance sounds like the ideal solution to not having the pay the high COBRA premiums. However, there are clear risks involved in choosing this option. These types of policies are usually exempt from HIPPA legislation and are not required to cover treatments related to pre-existing medical conditions, even if you have had continuous coverage for the past 18 months. In addition, these policies will not guarantee renewal of your coverage or pay for any ongoing treatments for medical conditions that developed while you were insured under the plan. Regulations that control the limitations of short-term health plans may vary by state.
Short-term health insurance can be a viable option in limited circumstances. If possible, you should always try to secure more comprehensive and permanent coverage as an initial choice.