10 Best Reasons to buy Short Term Health Insurance
There are many reasons why short term health insurance is an excellent choice for individuals looking for temporary coverage or an affordable alternative. Here’s why:
We all have life circumstances that cause us to need different types of insurance from time to time, and you want options that fit your situation and your budget.
Short term health insurance is a temporary medical insurance plan that provides important coverage to protect you from unexpected medical bills. If you are among the following, you should consider the value of a short term plan:
- Individuals and families looking for an alternative plan
- Those who miss the open enrollment period
- Temporarily unemployed
- Looking for COBRA alternative
- Adult children losing coverage from a parent’s plan when they turn 26 years old
- Recent graduates who do not have coverage under a parent’s plan
- Employees without group health insurance coverage
- Waiting for employer benefits to start
- Uninsured due to life circumstances
- Not eligible to apply for coverage on the marketplace during the special enrollment period
5 Short Term Health Insurance Trends*
- 61% of short term health plan buyers just need a temporary coverage solution
- 27% buy short term medical plans because of their affordability
- 51% of short term health plan buyers say they would be uninsured if not for the availability of short term medical
- In 2017, the average short term premium was $79 a month for a 30-year old.
- Comparing deductibles of 2017 short term health plans, the average deductible was $3,434 — $2,658 less than the average deductible for a bronze plan ($6,092)
* Trend data
- Business Wire — Demand for Short-Term Health Insurance Has Steadily Grown Since Implementation of the ACA
Should I buy Short Term Health Medical Insurance?
Short-term health insurance policies have just become more attractive, thanks to a federal rule change that now allows policies to be sold for almost a full year and possibly be extended for as long as 36 months.
These short-term insurance policies are a great solution for anyone between jobs or who doesn’t have insurance coverage at work, or who wants to bridge a coverage gap until Medicare, or who cannot afford the ACA (aka, Obamacare) policies available because they do not qualify for a subsidy.
How Short Term Health Insurance work?
Here’s how short-term insurance plans work: They require limited medical underwriting and are not required to cover pre-existing medical conditions (as ACA plans must do). They do not cover maternity expenses, and most do not cover prescription drugs. They typically have a lifetime payout maximum.
These limitations are significant, but the policies do provide insurance coverage, beyond a deductible, for potentially expensive illnesses or accidents that arise during the coverage period. And most of these short-term plans allow access to your choice of physicians or hospitals.
The real attraction is low cost. Short-term plans are typically far less expensive than ACA plans, especially if you do not qualify for a subsidy.
How much Short Term Health Insurance cost?
For comparison purposes, eHealth provided some examples of monthly premiums for individuals in Chicago. (Premiums for both ACA and short-term plans are set by geographic location, and the examples below do not reflect subsidies.)
—Female Age 45:
Lowest-cost Obamacare (bronze) plan: $378.65
Lowest-cost short-term plan: $68.61
—Male Age 26:
Lowest-cost Obamacare (bronze) plans: $268.52
Lowest-cost short-term plan: $40.62
Last year, short-term plans were suddenly limited to three months duration, after which you would have to reapply for new coverage. If you incurred a medical condition during your short coverage period, you might not even qualify for a renewal. And you faced a new deductible for each three-month period.
Now the 90-day limitation has been rescinded, the initial short-term coverage period has been returned to 364 days (each state can set limitations), and the policy can be renewed up to 36 months. Each insurer may have different wording, so be sure to check the renewal limitations and qualification limits when considering such a plan.
What to do to buy short term medical health insurance
Now that there is no longer a fine or penalty for not using the ACA plans, more unsubsidized health insurance buyers are likely to shop around for coverage.
The first step is to see if you would qualify for a subsidy under the ACA, which can reduce the cost substantially. The ACA plans likely afford broader coverage than most short-term plans, as well as coverage for those with pre-existing conditions.
Call Mintco Financial Health Insurance Advisors to review your situation.
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