What Is Short Term Health Insurance?

Short term health insurance is a popular medical coverage plan that features extremely low premiums and temporary benefits. Most major insurers offer this type of policy to individuals and families. Although premiums are very affordable, short term plans are most effective when the need for coverage is less than a year.

Typically, a temporary plan is designed to bridge the gap between two permanent policies. Ideally, this type of coverage works best for graduating students, unemployed persons, laid off workers, persons between jobs or anyone waiting for benefits to begin from a new employer. Also, since COBRA premiums are extremely high, it is often considered if COBRA benefits are just about to begin.

Rates for short term plans are considerably less than most other forms of coverage. It is not unusual for premiums to be 40%, 50% or even 60% less than a standard comprehensive policy. Rates will vary, depending on the state, but generally, UnitedHealthcare, Blue Cross and Celtic offer competitive rates in most areas. Rates are adjusted by most carriers a few times per year so it is a good is a good idea to keep current on your quoting information.

Deducible options range from $500 to $5,000 with most companies and coinsurance options typically, 0%, 20% and sometimes 50%. Of course, the lower the deductible and coinsurance, the higher the rate will become. Since the vast majority of short-term policies are never utilized for claims, higher deductibles are the most popular option. A deductible usually can not be changed during the period of coverage.

Coverage generally provides benefits for most major medical claims, such as in-hospital and outpatient expenses, emergency room, professional fees of doctors and surgeons, anesthesia and many other items. Office visits and outpatient prescriptions are usually not covered or subject to the deductible. Pre-existing conditions are also not covered on this type of policy.

While standard individual health insurance applications often take approximately 3-6 weeks to approve, temporary medical plans usually are approved within 48 hours. The application is short, with less than 10 medical questions and takes less than 30 minutes to complete. Most companies offer the option to apply online, via fax or through email. Although monthly billing is the most common option, paying for the full term of coverage will result in a lower average monthly cost.

Short term temporary plans are not designed to be kept on a permanent basis. However, with their low rates, flexibility and quick underwriting, they will continue to be a popular option for persons needing individual health insurance.