Short Term Health Insurance is designed for individuals who are without health coverage for a short period of time. If, for example, you missed the open enrollment period for the Affordable Care Act (also known as ObamaCare), a short-term health insurance can provide coverage for hospitalization and emergency care. It can also bridge the gap in coverage until you can get full-featured Individual Health Insurance. For instance, if you expect to qualify for employer-provided health care soon, plan to marry or anticipate any similar qualifying life event that would allow you a special enrollment opportunity, short-term insurance is a great option. You will have some much-needed protection against financial hardship in the event of an accident or illness.
Is Short Term Health Insurance Right for You?
Typically, short-term policies provide coverage for up to six months, although some plans may offer longer coverage. For example, if you have aged out of your parent-provided coverage, are waiting for another plan to start or are waiting for Medicare eligibility, it can provide temporary protection from accidents or unforeseen illness.
Short-term insurance does not provide the essential standardized benefits required by the Affordable Care Act. For example, short-term plans typically do not cover preventive care, routine physicals or preexisting conditions diagnosed or treated within the past two to five years, and renewal is not guaranteed. They may also come with lifetime limits on benefits -- a provision healthcare plans that qualify under the Affordable Care Act cannot impose. Your actual coverage, deductibles and premiums will depend on the plan and carrier you choose. Because short-term insurance plans fail to satisfy the Affordable Care Act requirements, people who purchase them face the individual mandate tax penalty.
Short Term Health Insurance vs. COBRA
If you have recently left your job, you may be eligible for continuation of your group health plan under COBRA. COBRA is not the same as short-term health insurance coverage. Often, however – particularly in situations where your former employer picked up some or all of your health premiums – you may find your COBRA payments to be more than you can afford. In that case, the limited coverage provided by Short Term Health Insurance may be a viable solution. You should be aware, however, that short-term coverage can nullify your eligibility for COBRA or similar HIPAA plans.
Things To Think About
- What type of coverage do you need?
- What is your age? Health characteristics?
- What are your Short-term requirements?
- Routine doctor visits and preventive care are probably not covered
- The deductible can be high
- There could be a waiting period
- Policy requirements will differ between carriers
- This is generally not "full coverage".
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