How Does Short Term Health Insurance Work?
Short term health insurance coverage is one of the least expensive types of health insurance. Short term health insurance policies are sold for coverage periods lasting either six or twelve months. This kind of coverage is also referred to as temporary health insurance.
Short term health insurance is intended to cover certain people, including college students, people who are between jobs, and people who are working at a temporary job that does not provide health insurance. An insurer who issues short term health insurance is not required to renew coverage for a new term.
One reason that temporary health insurance coverage is cheaper is that it does not cover pre-existing conditions. Pre-existing conditions include health conditions that were diagnosed or treated before the policy started. A condition is also pre-existing if a patient had signs of the condition prior to the beginning of a policy.
Some insurers sell short term policies with add-ons for dental and vision insurance or discounts. Some of these policies will cover prescription drug coverage as well. Preventative care and wellness care are usually not covered by short term health insurance.
Is Short Term Coverage Right For Me?
Short term health coverage can be a less costly alternative to expensive COBRA coverage. COBRA coverage is provided by federal law to people after they leave a company that provided them with health insurance benefits. A COBRA enrollee can continue the same coverage they had as an employee for eighteen months if they pay their entire premiums.
People who are planning to buy guaranteed issue health insurance should not buy short term coverage first. Short term coverage can make one ineligible to be guaranteed coverage under a guaranteed issue policy. Guaranteed coverage is very expensive, so it is not usually an option for most people.
Short term policies are usually easier to qualify for than regular individual health insurance policies. Short term or temporary policies are best used for unexpected major medical conditions and emergencies. They help protect the policy holder from major financial loss due to an unexpected catastrophic health event. Despite its limitations, short term coverage is better than no coverage at all.