When Should I Use Short Term Health Insurance?

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Quick Definition:

Short term health insurance covers basic health care costs for short periods. Many policies will cover one, three or six months. They cover major medical costs and do not include well visits or annual check-ups. They are designed to protect you from a medical emergency and most do not meet the requirements set up by the Affordable Care Act. Most short term health insurance policies will exclude specific conditions. You may not qualify if you are pregnant or if your spouse is pregnant.

When Should I Use Short Term Health Insurance?

Short term health insurance may be the perfect solution if you have a month or two gap between health insurance policies. You may be wondering what to do if you do not want to use your expensive COBRA coverage option, but are leery of going without health insurance while looking for a new job, waiting for insurance to start at a new job or while you are waiting for the beginning of your coverage on an independent insurance plan. Short term health insurance can provide a low cost, short-term option to help you fill in the gaps you have in coverage.

They can help you avoid having to pay for medical bills with no health insurance.

How Much Will Short Term Health Insurance Cost?

Short term health insurance can be very inexpensive. Rates can be as low as $30.00 a month. However, the plans all operate with a high deductible that must be met before insurance begins to pay medical costs. Some plans provide full coverage once you have met the deductible other have additional coinsurance. If you are pregnant most short term health insurance will not cover you, and if your spouse is pregnant they may not cover you on an individual policy as well. Generally short term health insurance does not cover well medical visits or other routine care that would fall under an annual doctor's visit.

If you are pregnant, you may qualify to apply for health insurance under the health exchanges set up by your state for the Affordable Care Act. You can also qualify if you have a had a life changing event or lost your coverage. Be sure to check out this option in addition to short term health insurance plans. 

How Long Will Coverage Last?

Short term health insurance policies have a time limit in how long they will provide coverage you can receive coverage for one month and some policies will extend it up to three months. These policies are designed to protect you and your assets during the short lapses that you may have in your regular insurance coverage. An insurance agent can explain the differences in coverage and what you will be responsible to pay for. This is more of stop gap insurance policy. It is there to cover the emergencies that may happen while you are waiting for your new health insurance policy.

Short term health insurance does not meet the insurance requirements for the Affordable Care Act. This means that you may be penalized for the months that you use a short term health insurance policy. However, it can still protect you financially if you do have a major medical emergency. If you know that your gap is only a month, then you may end up saving money by using a short term policy even considering the prorated fine that you will have to pay. Be sure you consider all of the options available to you and see if can qualify for other insurance either through your parents plan or through the Affordable Care Act.


When Should I Get Short Term Health Insurance?

You may consider using the policies if you do not want to have a preexisting condition or waiting clause on your next health insurance. Since the policies are so inexpensive it may be worth the little bit of money to get short term health insurance. Additionally, many alumni organizations can provide you with a contact and possible discounts on the policies when you first graduate. This cover you while you look for a job and wait until your health insurance policy begins at your new employer. This is a good option to help you cover the gaps that may occur between jobs or gradation and your first job.

If you no longer qualify for insurance on your parents plan, you may choose to enroll in a short-term plan while you look for a better one or wait for open enrollment options.