Perhaps you are in between jobs, waiting for your insurance coverage, and waiting for medical care coverage eligibility. Like many Americans, you may be alarmed at your health care insurance costs in the last several years.

Whether you are in a gap period, concerned about rising health insurance costs, or both, you are curious about what short-term health insurance is. You want to know what the pros and cons are of short-term health insurance. You aren’t the only one.

The average emergency room visit cost may be as high as a car note or mortgage. Did you know that between 2013 to 2018, health care premiums doubled? Short-term health insurance sales increased by 150% between 2013-2015.

Short-term health insurance is a quick insurance plan that can last up to a year. Learn about the uses and benefits of a short-term health insurance plan.

All You Need to Know About Short Term Health Insurance

You are in a gap period with your insurance. You want to know all you can about short-term health insurance. Short-term insurance is a healthcare plan that will cover you during a transition or gap period of being covered.

This may offer coverage for you if you are in transition and in between jobs. It may help uninsured entrepreneurs, recent graduates 26 or older, and recent retirees as well.

Short-term insurance may help you if you are out of open-enrollment periods and don’t have a qualifying life event like marriage, birth of a child, or loss of employer-based coverage. It may be a viable option if major medical coverage is not currently in your budget. In your situation, short-term health insurance may be better than no insurance.

There are three components of short-term health insurance that include premiums, benefits, and cost-sharing.  You want to stay healthy without the medical bills whether you get short-term health insurance or not.

You will want to know about short-term health insurance coverage, duration, and premium costs. You will want to review the uses and benefits of a short-term health plan and decide what is best for you.

1. Coverage

Short-term health insurance coverage includes office visits, specialty doctors, and wellness visit, to name a few. Many short-term health plans limit the number of visits as well. It is important to note that mental health, prescriptions, and maternity care are typically not covered. You may learn more here. 

The basics are that short-term health insurance is meant to be temporary. As a result, the coverage is limited, not guaranteed, and is affordable. You may want to be aware that short-term health insurance does not comply with ObamaCare or the Affordable Care Act.

It does offer immediate coverage within 1-14 days, whereas major medical coverage typically won’t start until 2-6 weeks upon eligible enrollment.

2. Duration

Short-term health insurance typically lasts 1 year with the ability to renew up to 3 years. Most states offer a 1-year maximum.

You use it similarly to how you use your healthcare or major medical. You will receive a card. Before you use it, you will want to check and see what doctors are in-network. The best way to do this is to call the doctor’s office before you visit. 

You will want to estimate how long you think you will need coverage and check your state limitations. If you no longer need coverage and the plan expires, there is nothing else you need to do. If your plan is nearing expiration, you will want to explore what your options are.

3. Costs

You have options with plans with short-term health insurance with deductibles, coverage, and premiums. In spite of various limitations, short-term health care insurance costs may be 40-70% lower than average health care premiums.

The average cost of short-term health insurance is $113 based on a national average. In comparison, the major medical average is over $400. However, major medical coverage may be government subsidized, whereas short-term health insurance is not.

Cost-sharing is included with co-pays for doctor’s visits, deductibles, and co-insurance. Your deductible will typically have to be met in full before co-insurance percentages take effect.

They may be a viable alternative during a transition or gap in health care coverage. If you qualify for short-term health coverage, you want to be sure to ask your provider what is included and not included so that you are aware. You will want to evaluate your situation to see if a short-term health policy is best and for how long.

Short Term Health Insurance in Review

You may see why people may benefit from short-term health insurance depending on a variety of transition or gap circumstances. With short-term insurance, you may increase coverage and peace of mind in between transitions or hardships.

Short-term insurance may provide you temporary coverage for you if you are in transition and in between jobs. It may help you if you are an uninsured entrepreneur, recent graduate, and recent retiree without coverage. Also, if you’ve missed open-enrollment periods, this may help you get limited health care coverage.

It may be a viable option if major medical coverage is not currently in your budget. In your situation, short term health insurance may be better than no insurance.

Please comment on any experiences you have had with transitions or gaps in health care coverage and what you decided to do.

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