Nowadays, most Americans have access to short term health insurance plans. This wasn’t the case before 2019, because short term plans were seen as inferior to regular full-coverage plans. However, these plans can be a great stop-gap measure. They can protect you for a brief period while you choose an insurance plan that’ll work best for you.
Big and smaller medical insurance companies usually have a couple of short-term policies, but they come with their pros and cons. Pros and cons tell you exactly when a short-term health insurance policy might be needed, and when you should actively avoid it.
Pros and Cons of Short Term Health Insurance Policies
- Low premiums: The costs of short term health insurance plans can be as low as $40. This can be a welcome reprieve, especially if you're low on cash at the moment.
- Fast approval times: Some short-term plans can be approved in a day to a couple of days. You don’t have to wait months like full-coverage plans.
- They’re not as complicated: There are lots and lots of details and blank spaces to fill out when you're buying a regular health insurance plan. This process is a lot shorter when the policy is short-term.
- It can last for some time: The amount of time your short-term plan can last is dependent on the policy you buy, the company you purchased it from, and the state you live in. Some states in the USA don’t allow short-term medical insurance policies to last longer than three to six months. However, some plans can last up to 12 months in some states and can be renewed twice.
- Not ACA-compliant: Most short-term health insurance plans don’t follow the rules stated by the ACA for health insurance policies. This can lead to certain consequences.
- Might prevent you from getting COBRA in the future.
- Short-term health insurance plans don’t cover preexisting conditions: If you need regular medical care to manage preexisting conditions, avoid short-term health insurance policies.
- The network of doctors can be extremely limited.
- They're banned in some states.
- Some of these plans have high deductibles and out-of-pocket costs and can cost more than standard policies in the long run.
- Low coverage: There are several medical bills that these insurance policies don’t cover. For example, costs for maternity, substance abuse, and mental health problems are usually not covered.
So, when should you buy a short-term medical insurance policy?
There are a few instances when you need to look for a short-term plan with medical insurance companies.
- When you’re between jobs and not covered by employee insurance.
- If you recently graduated from college.
- If you're traveling outside your regular plan's network coverage.
- When you’re a dependent but can no longer be covered under your parent's plan.
- When you're waiting for your regular coverage to kick in.
- When you’re a new employee waiting for your employer’s group coverage to kick in.
- If you're a temporary employee.
- When you’re waiting for the ACA marketplace coverage to start.
These situations should be based on the fact that you do not have any preexisting conditions or family to cover.
Short term health plans act as placeholders for regular full-coverage policies from medical insurance companies. However, they can serve as a great way to get coverage when you can't get a full insurance policy. For more information on the best short-term health insurance plan for you, contact Fast Health Quotes.
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