Short-Term Health Insurance

What Is Short-Term Health Insurance?

Some insurance policies offer policies designed to tide people through short lapses in health insurance coverage. These policies are called short-term or temporary health insurance policies.

While it may be possible for you to find a short-term health insurance policy that will cover you for up to 36 months, most of these policies are limited to 12 months of coverage or less. Short-term policies are ideal for healthy people who are going through some kind of transition - for example, recent college graduates waiting for health insurance benefits at their first job to begin. The operative term here is "healthy" - short-term health insurance policies are underwritten, which means that the insurance company must be satisfied that you are not likely to make many claims for the duration of the policy.

Read on to find out more about short-term health insurance, including how much it costs and what it covers.

How Much Does It Cost?

Short-term health insurance tends to be significantly cheaper than other types of insurance, including COBRA continuation coverage. Some people may qualify for comprehensive coverage for less than $100/month. This is why some people who lose their job-based insurance choose short-term policies rather than electing COBRA. However, if you fail to elect and exhaust your COBRA continuation coverage, you will lose several consumer rights - including your right to coverage of any preexisting medical conditions, and your right to purchase a permanent individual health insurance policy at a later date.

If you do decide to buy a short-term health insurance policy, make sure you understand what you are getting for your money. If you find a policy for $50/month, but it has a $3000 deductible per injury or illness, you will be paying for virtually all of your medical expenses out of pocket. Such a policy would only protect you if you suffered an extremely costly injury or illness. Make sure you read your policy papers and understand what your likely out-of-pocket expenses will be.

What Is Covered?

Short-term policies generally do not cover routine preventative care or preexisting conditions. However, if you become ill or injured while covered under a short-term health insurance policy, any emergency services, hospitalization, diagnostic test, or follow-up visit charges you incur should be covered under your policy. As long as your health care expenses can be linked to a specific illness or injury suffered during the term of coverage, you should be covered.