Temporary health insurance, also known as short term health insurance, can be an easy and quick way to get the health coverage you need until you find or qualify for more long term options. Short term health insurance can help you avoid costly medical bills incurred during emergencies and unexpected sickness. It is a perfect solution for individuals who have recently been laid off or are in between jobs, missed certain health insurance deadlines, need proof of insurance, or are self-employed. While there are some disadvantages of short term health insurance, it does provide a quick solution for health coverage.
Perfect for Individuals Who Were Laid Off or Are in Between Jobs
The most common reason people obtain temporary health insurance is because they were unexpectedly laid off or they are in between jobs. Being unexpectedly laid off can cause serious financial problems as well as a lapse in medical coverage. Individuals who do not expect to be laid off typically do not have time to figure out their options before they lose their coverage. While some jobs are required to offer the continued health plan at a group rate through the Consolidated Omnibus Budget Reconciliation Act (COBRA), others are not. Additionally, only certain conditions apply for COBRA coverage. As such, people who do not qualify for COBRA can benefit from obtaining short-term health coverage.
Missed a Deadline, No Problem!
Although Obamacare provides health insurance for everyone, there are certain deadlines that must be met. Aside from Obamacare, this is also true for other medical insurance coverage. Missing deadlines can make individuals ineligible for coverage. While it is common for people to miss deadlines, insurance companies are quite inflexible about making exceptions. This can be particularly problematic and leave people uninsured for more than three to six months at a time. A solution is temporary health insurance, which can provide coverage during the interim of having no additional insurance. Short term health insurance can provide relief since missing deadlines can be frustrating especially if you are unaware of when health insurance paperwork and applications are due.
A Great Way to Fill in Insurance Gaps
Let’s say you apply for insurance within the deadline but there’s still a wait time before coverage starts. During the waiting time, you are not covered. This is something that most people do not realize until they become ill or have an injury and realize they do not have proper insurance. Applying for insurance in the middle of an emergency or during an injury does not guarantee that you will be covered. As such, short-term health insurance is a way to ensure that you are properly covered while you wait for other insurance to begin.
Proof of Insurance Requirements
Short term health insurance can provide proof of insurance that you may need to participate in certain activities or for college. Some activities require that you have proof of health insurance. Specifically, participating in athletic events such as marathons and other sporting events occasionally require you to show your proof of insurance to prevent liability on their end if you are injured.
Similarly, most colleges require their enrolled students to have health insurance. As a college student, if you are unemployed and are not covered under your parents, temporary health insurance can give you the proof of insurance that you need.
Often individuals who are self-employed at a small business may not qualify for group rate insurance plans and the insurance plans they do qualify for may be more expensive. Until they can build up their income and business, short term health insurance may provide a nice temporary solution. They can temporarily obtain affordable coverage that can help them as they continue to expand their business.
Other Benefits of Temporary Health Insurance
Short term health insurance is usually reasonably priced and much more affordable than other options. Additionally, the application process is quick such that coverage can begin even just a day after applying. This is a relief to many who are in need of some type of coverage right away. Temporary health insurance can end up saving people thousands of dollars in medical expenses for low monthly rates.
Peace of mind is also provided by short term health insurance. You really can’t put a price on having reassurance that if something happens to you medically, you will be covered. The fear of not having medical insurance is stressful enough to induce illness. Knowing that there is a short-term solution that can last anywhere from a month to a year can provide people the solace they need.
Disadvantages of Short Term Health Insurance
While there are many benefits to short-term health insurance, there are also many disadvantages worth mentioning. First, temporary health insurance is not federally regulated. Thus, it does not have to meet certain standards that are required of other health coverage companies. Although Obamacare requires insurance companies to openly accept all people regardless of preexisting conditions, short term health insurance does not have to abide by that standard. As such, they can exclude individuals with pre-existing medical conditions either before or after a claim. This is problematic, as many people may not know they had a preexisting condition until they are hospitalized and then they find that they are not covered although they thought they were.
Another disadvantage of short-term health insurance is there is no requirement to auto-renew the policy. While federally regulated health insurance coverage typically has to renew the policy unless certain criteria aren’t met, short term health insurance companies do not have to renew.
In summary, the short term health insurance industry is largely unregulated which means that certain protections consumers had under federally regulated programs do not apply. While this can be a major disadvantage, temporary health insurance may still be a good option for individuals who do not have preexisting conditions and simply need a quick solution to their health coverage needs.