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Why buying a short-term health insurance plan could be right for you

Need health insurance for a limited time? This type of plan might be just what you need.

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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 can cover you for nearly a year, just a month, or an amount of time in between — in other words, they are 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 uhone.com to get started.

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 range from 30 days to six months or a year, 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

Although you might need short-term insurance due to a life event such as leaving your parents’ plan or changing jobs, it’s not required, says Baechle.

That’s different from the plans offered under the ACA, which allow you to sign up for insurance only during certain times, such as Open Enrollment in the late fall or after a big life event, called a Qualifying Life Event (like having a baby or getting married).

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.

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 uhone.com to get started.

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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.