Health Exchange Rates


Short-Term Health Insurance Explained

There are some times when individuals find themselves straddling a precarious financial bridge that spans from being completely without insurance to being part of a standard health plan, the result of not being able to absorb full health insurance expenses by themselves.

Most short-term health insurance packages may not allow for routine trips to the doctor, don’t cover pre-existing conditions at all, including substance abuse or mental health issues and are usually set up to deal with any important medical crisis that may befall a person. With respect to pre-existing conditions, it’s possible that any such condition that began during the original short-term coverage might not be covered if another short-term plan from another source must be purchased. That’s because the original packages (which can cover as short as a 30-day period and as long a full-year stretch) can’t be extended and are non-renewable.

While it’s entirely possible that the following definition differs from long-term coverage, what constitutes a pre-existing condition can be dependent upon the amount of time an individual has consulted with a doctor, the type of treatment received or medication taken. This runs the gamut from six months to three years, and is usually based on where an individual lives.

Health insurance availability increased with the passage of the Affordable Care Act (ACA)—also known pejoratively as Obamacare--since it requires the sale of health insurance by insurers to almost everyone, regardless of a person’s current health. Termed “guaranteed issue,” the concept covers those individuals whose pre-existing condition resulted in them being rejected from short-term health coverage.

Beginning in 2014, temporary health insurance doesn’t meet the standard of care under the ACA, therefore is not an “approved” health plan. Some people may actually save more from temporary insurance than the cost of the assessed fine ($95 or one percent of adjusted annual gross income, whichever is larger.) Synonyms for temporary insurance can include short-term medical insurance, temporary health insurance or short-term health insurance.

There are advantages to having short-term health insurance. Traditional premiums are more expensive, most begin 24 hours after the date a person applies, while most are not restrictive with respect to a preferred healthcare provider—meaning that those who sign up for coverage will receive coverage if they need to take a trip to a hospital or doctor anywhere within the United States. Finally, the most obvious benefit is that it allows for health coverage until a complete plan is set to begin.

Despite all those positive aspects, there are drawbacks; beginning with the fact those people with this type of insurance could lose their eligibility for COBRA. People over the age of 65 almost always are prohibited from purchasing this type of coverage, while such things as preventative coverage, vision, and dental care are not available. As previously noted, these plans also cannot be renewed, pre-existing conditions can be reasons for denial of coverage and penalties can be assessed for holding this coverage.

The subject of pregnancy and how it can be affected through this type of coverage is extremely important to remember. Since it’s considered a pre-existing condition, it usually will not be covered. That means that taking a closer look at purchasing Affordable Care Act coverage might be the best course of action for these circumstances.