You just turned 26 and are now realizing that you’ve been dropped from your parents’ health insurance plan. Or maybe you’re in between jobs. Or maybe you missed the Affordable Care Act (ACA) Open Enrollment Period.
Whatever your situation is, it puts you in the same position: You either don’t have health insurance or you’re about to lose your coverage and need a solution quickly.
One popular option is to purchase a short-term health insurance plan. Short-term plans may be ideal for situations just like the ones above.
Although short-term insurance doesn’t work for everyone and every situation, it does offer to many folks a budget-friendly option for health insurance coverage.
Before you sign up for a short-term plan, it’s worth taking a look at some of the pros and cons.
Looking for a short-term insurance plan? Explore your options today.
Short-term insurance begins quickly
While some types of health insurance have start dates that may be weeks away from when you first signed up for them (for example, an employer that makes you wait 30 days after you start for health coverage), you can get short-term health insurance quickly, Jeff Baechle, vice president of Individual Market Product Strategy at UnitedHealthOne, says. Sometimes even the day after you sign up for it.
You get to set your own end date
If you get traditional health insurance, you’re covered on an annual basis, at which time your plan can be renewed. But short-term plans can provide 4 months of total coverage (3 months plus a 1-month extension) in a 12-month period, which is helpful if your situation is temporary.
“It’s really a bridge to get you to the other side of where you’re going,” says Baechle. “If there’s an unexpected gap [of time], that’s what it fills in.”
You don’t need to have a big life event to get short-term insurance
That's different from the medical plans offered under the ACA. You're only able to sign up for insurance during specific times of the year, such as Open Enrollment in the late fall. Another option: If you have a major life event, like having a baby or getting married (aka a qualifying life event), you will get a Special Enrollment Period, or window of time, when you can sign up for health insurance.
You may pay less for a short-term plan
Short-term plans often cost less than long-term ones, according to Baechle.
They’re designed to have a low premium (the amount you pay monthly for insurance). But they also tend to have higher deductibles (the amount you pay out of pocket until your insurance kicks in) and higher out-of-pocket maximums (the total amount you’d have to pay in one year).
But if you’re in good health and don’t anticipate needing too much medical care while you’re on a short-term plan, it might be your most affordable option.
Your coverage is portable with short-term plans
Many short-term plans have broad, nationwide networks, so you have a good chance finding in-network care at pre-negotiated discounted rates wherever you are. And if you’re moving soon, a short-term plan can be a way to take your coverage with you from state to state until you’re able to sign up for a longer term plan in your new location.
You may not be covered if you have a preexisting condition
The ACA ensures that even if you have preexisting conditions — for example, a cancer diagnosis — you’ll be covered.
But short-term plans don’t have those protections, says Baechle. That means you’ll need to answer questions related to your medical needs and be in reasonably good health to get a plan.
If you do have a chronic condition that requires frequent treatments, appointments, medications, and procedures, then a short-term plan may not be the best choice for you. That’s because, in most cases, short-term insurance plans don’t cover preexisting conditions.
It all depends on your state’s definition of a preexisting condition, which might mean an illness you received a diagnosis or treatment for within the last 2 to 5 years.
Need health insurance for a limited time? Compare short-term health insurance plans.
Your coverage could be limited
Even if you’ve met the deductible, your short-term plan may have a limit. For example, if your policy has a $250,000 cap and the cost of your care goes beyond that amount, you would be responsible for any payments above that.
Another consideration, Baechle adds, is that some procedures or treatments may not be covered, and it’s important to ask what those are. Also, coverage may vary by state.
In general, it helps to know what types of health services you’ll need before you sign up so you can discuss all your coverage options based on your situation and location.
Your risk is greater without insurance
Still, regardless of the up-front costs, keep in mind that not having any insurance isn’t such a good idea either. Whether you choose a robust ACA health plan or a portable and flexible short-term plan, both are better options than leaving yourself vulnerable to medical expenses without help from insurance.
If you do need a temporary solution to an insurance gap, then despite its limitations, a short-term health insurance plan may be worth a look.
Take a look at a short-term insurance plan. Explore your options today, contact a licensed insurance agent at 1-844-211-7730.
Sources:
Healthcare.gov. "Coinsurance." Retrieved from https://www.healthcare.gov/glossary/co-insurance/. Accessed January 3, 2022.
Healthcare.gov. "Coverage for pre-existing conditions." Retrieved from https://www.healthcare.gov/coverage/pre-existing-conditions/. Accessed January 3, 2022.
Healthcare.gov. "How to change, update, or cancel your Marketplace plan." Retrieved from https://www.healthcare.gov/keep-or-change-plan/automatically-enrolled/. Accessed January 3, 2022.
Healthcare.gov. "How to get or stay on a parent’s plan." Retrieved from https://www.healthcare.gov/young-adults/children-under-26/. Accessed January 3, 2022.
Healthcare.gov. "Out-of-pocket maximum/limit." Retrieved from https://www.healthcare.gov/glossary/out-of-pocket-maximum-limit/. Accessed January 3, 2022.
Healthcare.gov. "Qualifying Life Event (QLE)." Retrieved from https://www.healthcare.gov/glossary/qualifying-life-event/. Accessed January 3, 2022.
Healthcare.gov. "What are HDHPs & HSAs?" Retrieved from https://www.healthcare.gov/high-deductible-health-plan/hdhp-hsa-information/. Accessed January 3, 2022.
Healthcare.gov. "When can you get health insurance?" Retrieved from https://www.healthcare.gov/quick-guide/dates-and-deadlines/. Accessed January 3, 2022.
UnitedHealthcare. "Short term health insurance frequently asked questions (FAQs)." Retrieved from https://www.uhc.com/health-insurance-plans/short-term-health-insurance/faq. Accessed January 3, 2022.
UnitedHealthcare. "Short Term Medical plans for times of transition and change." November 11, 2021 Retrieved from https://www.uhone.com/api/supplysystem/?FileName=46995E-G202112.pdf.
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