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Short-Term Health Insurance Benefits

Many individuals between jobs, in a waiting period for group insurance or students may find that short-term health insurance meets their needs. Short-term health insurance, also called temporary health insurance, provides coverage for one to 12 months. These policies are not renewable after 12 months and usually cover only hospitalization, emergency care and related costs. If you need full coverage such as routine care and outpatient services, you should consider an individual health insurance policy instead of a short-term policy.

  1. Short-Term Health Insurance Basics

    • Temporary health insurance is just that, temporary. Most policies require payment in advance and a policy end date. The policy end date is chosen at the time of policy purchase. You can obtain month-to-month coverage but after 12 months, the policy is non-renewable. These policies are designed to provide coverage only for accidents and emergencies and not full coverage. They usually exclude routine care, doctors' visits, outpatient procedures and pre-existing conditions.

    Finding Short-Term Health Insurance

    • Several major health insurance companies offer short-term health policies. You can obtain a policy through a licensed insurance agent or directly from the insurer. To learn about plan options, benefits and apply directly, visit the websites of the carriers. Companies such as Assurant Health and United HealthCare offer short-term plans. You can also access a site such as ehealthinsurance, which allows you to select several options to compare plans side-by-side. Most short-term plans do not have underwriting requirements, making coverage available to you within a day or two.

    Out-of-Pocket Costs

    • Short-term health insurance plans have several options for deductibles and co-insurance. The premium -- the cost of the policy -- will depend on your selection of deductible and co-insurance amounts as well as length of the policy. In addition, some plans offer a discounted rate for pre-paying for several months. Deductibles on short-term policies generally range from $250 to $5,000, with many options in-between. You must pay the deductible amount before the insurance company starts to pay. Co-insurance is the shared cost between you and the insurance company, represented by a split percentage. Most short-term plans split the costs 80/20 or 50/50 with the insurer paying the larger or equal amount.

    Bottom Line

    • Short-term insurance plans can be a good idea to fill in the gap between jobs. Also, if you are new to a job and have a waiting period before you are eligible for group insurance from your employer, you may elect short-term coverage. Keep in mind that short-term plans have many limitations and exclusions and rates vary greatly depending on out-of-pocket costs and length of policy. There is likely no reason to get a short-term policy if you have the option of employer-based group health insurance, qualify for governmental benefits or can afford full-coverage individual plans.

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