Health Insurance: Short Term
Short term health insurance is a health insurance policy which typically lasts for between one and six months. Some companies offer coverage for up to twelve or thirty six months.
Short term health insurance policies work for people who are going to be without health insurance for a short period of time, such as between jobs, or if you're about to go back to school, or you lose dependent status under your parents' health insurance, or if you're waiting for group coverage or Medicare to begin.
Short Term Health Insurance Policies do not work for:
- People with a pre-existing health condition. What is "pre-existing" varies from state-to-state. However, generally this means no coverage for people with a health condition that was diagnosed or treated within the page three to five years. (To learn how to purchase health insurance, see: How To Obtain Health Insurance.)
- People who may be eligible for HIPAA protection when leaving work. As you will see if you read about HIPAA, a person with a group health insurance policy generally has the right to convert to an individual health insurance policy with no medical questions asked. Purchasing a Short Term Health Insurance policy will make you ineligible for guaranteed health insurance under HIPAA.
- People who need continuing coverage. Coverage is generally not renewable. Health insurance companies may allow insureds to reapply for one other term. If you have a claim during the first term, companies tend not to grant renewal or they exclude coverage for the condition for which you were treated during the original term.
Coverage of short term health insurance policies varies. Generally coverage is of the fee-for-service (Indemnity) type: you are free to go to any doctor or specialist, and to have any medically necessary treatment. Certain procedures may be subject to pre-certification (pre-approval) by the insurer, such as entering a hospital. Subject to a deductible, the policies generally offer comprehensive coverage, including doctor services, drugs, tests, in patient hospital stays, in patient and out patient procedures such as surgery, skilled nursing care and rehabilitation.
Short Term Health Insurance policies generally do not cover preventive care such as annual physicals, dental or vision care. Coverage is generally limited.
Deductibles are generally high. Coverage is not necessarily renewable.
Short term health insurance policies are generally purchased in one month increments so it is easy to drop coverage at the end of any month.
Applications for a short term health insurance policy are generally short.
These policies reflect the limited coverage and not accepting people with a pre-existing health condition by costing a good deal less than a regular health insurance policy. Premiums are typically half the price of a permanent policy, or less.
If you have a short term health insurance policy, and obtain a long term policy, you can cancel the short term policy as soon as the long term coverage becomes effective.
Short term health insurance policies cannot be sold in all states.
NOTE: To help look for a short term policy in your state, it may help to contact a health insurance broker. To help find and choose one, click here.