Short-Term Health Insurance Information

People experience the need for short-term health insurance for a variety of reasons, including being between employment or after college. Going without health insurance, even temporarily, can be costly. An unexpected trip to the emergency room or an unplanned hospitalization can be financially devastating without health insurance. Fortunately, there are a number of options for those seeking short--term health insurance information.

COBRA

• COBRA allows for continued health insurance coverage after leaving a job.

  The Consolidated Omnibus Budget Reconciliation Act of 1985, known as COBRA, requires employers to offer continued coverage when a person leaves a job where he received employer sponsored health insurance. Any employer with 20 or more employees must facilitate the continuation of the coverage for 18 months after an employee leaves the company. However, the former employee is responsible for the cost of this continued coverage, including monthly premiums, co-pays and deductibles.

  Some U.S. states have passed "mini-COBRA" legislation that covers those who have left companies with fewer than 20 employees. Check with your state's department of insurance to see if your state has passed such legislation.

Private Insurance

• Private insurance can be a short-term health insurance option.

  Continued coverage with COBRA may be cost prohibitive or may not be available in some cases. Private insurance can be another short-term health care option. Short-term health insurance usually works like an indemnity insurance plan, which allows an individual or a family to receive medical care from any provider. These plans require monthly premiums and then cover a percentage of the health care costs after a deductible has been met.

  This option offers latitude in choosing doctors and usually covers a percentage of prescription drug costs as well. Because an indemnity plan is a fee-for-service plan, it has the potential to be expensive for someone needing extensive health care.

High Deductible

• High-deductible insurance coverage helps with hospital costs.

  A deductible in health insurance is the amount a policy holder must pay annually before the insurance plan begins paying for health care costs. A high deductible insurance plan has the advantage of low monthly premiums. According to the government's Agency for Healthcare Quality and Research, high deductible plans will cover 100 percent of expenses after the deductible has been met. Consumer-directed plans such as high deductible health insurance give the consumer latitude in choosing providers. Some insurance companies have also negotiated discounts with certain doctors and hospitals that can help lessen the out-of-pocket costs.

Health Savings Account

• Health savings accounts earn interest.

  A health savings account (HSA) is another consumer-directed type of health insurance that is available temporarily or long term. HSAs work in tandem with high deductible plans and allow the consumer to save money for health care costs tax-free. Contributions to an HSA can earn interest and be used for a variety of medical expenses. Eligible expenses count toward the deductible.

Considerations

• The cost is a consideration for short-term health insurance.

  A 2005 Harvard University study found that almost half of all bankruptcies in the United States are due to medical costs. Even a temporary lapse in health insurance coverage can be financially risky. However, there are important considerations when it comes to short-term health insurance. Temporary health insurance plans generally do not cover preventative care such as annual check-ups. These policies do not cover pre-existing conditions, dental or vision. Consumers can receive short-term health insurance coverage for as little as three months, and some plans can be renewed up to 36 months.