The concept of short-term medical coverage sounds like a great idea, but it may not be a great idea on paper. Depending on your situation, this type of short-term solution may cause more pain than you started with. This is due to a number of exceptions and clauses in the way short-term coverage works, which we’ll cover.
Who could benefit from short-term health insurance? Those who are in-between jobs, have to wait before their coverage kicks in, aren’t eligible for Medicare yet, or have just missed the enrollment period for the year.
Short-term coverage can go into effect the next day, which makes it ideal for those who have an emergency medical issue and need to see a doctor.
Let’s learn more about this coverage and how it works.
What Gets Covered?
This question posed for short-term medical coverage delivers no straight answers. Technically, you may get all you need to be covered under a short term plan. If you only need standard checkups and prescription, you may think it’s great.
If tragedy strikes and you need major emergency care, then don’t place your bets on being covered. This is because short term health insurance doesn’t abide by the same rules covered under the Affordable Care Act ($250k-2M maximum). Instead, short term plans can vary wildly, based on the type of care and how much is covered per day.
You may see coverage as little as $1,000 per day, which barely covers minor visits, let alone one that includes a bed, x-rays, tests, and surgery.
Another “maybe” answer to what is covered: preventative health care. Usually, you’ll find that most care provided by specialists is limited or excluded. The same goes for prescriptions, as not all prescription types may be covered.
Doctors in Short-Term Medical Coverage
If you are switching from your standard plan to a short term plan, you may or may not need a new doctor. Some doctors are included in the network offered by short-term health insurance. This will be something you’ll have to research before signing up.
Also, some short term plans will require you to choose a primary care provider for all non-emergencies. Most will leave it up to you, whether you want a PCP or not, which is appealing to many. As far as specialists, you won’t need a PCP to refer you, forcing you into care you cannot afford.
Personal insurance alternatives give a level of flexibility that appeals to many Americans.
Possible Penalties
There was a pretty big catch for short-term coverage, which was that you would get penalized for using it instead of full coverage. It did not satisfy the federal tax guideline of minimum essential coverage, thus forcing people to pay that penalty.
Now that the government has done away with that, the only other drawback left here is the lack of tax subsidies that ACA members receive. The math may still work out in your favor, though, since short term insurance can cost hundreds less than ACA health plans.
Pre-existing conditions also play a roll in getting short-term coverage. Legally, these insurance plans are held under no such obligation to provide coverage if they deem you too high of a risk. This can range from pregnancy, a birth defect, to everyday allergies.
If you do qualify with a preexisting condition, you may end up paying a higher premium. This sort of defeats the purpose for most wanting to switch in the first place. Paying premiums as high as an ACA plan, but for less coverage and higher deductibles is a raw deal.
When Short-term is Beneficial
For those lucky enough to be in good health and don’t work/live under any hazardous conditions, paying for 12 months of covers seems excessive. If you’re only going in for the occasional stomach virus, physical, or common prescription, then you’re basically using it for a few months at a time.
The fact that you can sign up for coverage and, potentially, use it the next day is a huge draw. Short term plans are offered by a number of insurance providers with various plans and deductible options to choose from. Keep in mind that the cheapest plans will come with deductibles that shoot beyond your average ACA coverage.
The best part is that you can cancel these short term plans anytime without paying a penalty. If you’ve just made your monthly payment, that money gets returned to you. Change your mind and you can simply apply for a different plan to keep your coverage going.
Things to Watch Out For
Yes, being able to cancel your plan and start a new one in a short period of time is great. The catch here is that any care you received under your previous short term health insurance will be considered as preexisting conditions. Most of the time this won’t affect your new coverage, as long as the care you received falls into common ailments.
If we’re talking about cancer treatments, you will be disappointed to learn that some plans don’t cover treatments in your first month. In fact, no treatments for related illnesses will get covered in the first five days. This is not the plan to get on for catastrophic health insurance.
Other potential surprises include inpatient care plans only covering weekday hospitalizations, not weekends. This makes no sense from a patient’s perspective. Statistics show that there is a great risk for complications on the weekend. These are things that you have to account for when researching plans.
Personal Insurance that is Personable
There is definitely an equal share of pros and cons when it comes to short-term medical coverage. It’s not for everyone, but, then again, neither is ACA insurance plans. In fact, most people still can’t afford it.
If you want to have the peace of mind, knowing you’re covered in case of an emergency, a short-term health plan may work for you. Not everyone needs the same level of coverage, which is why this type of health plan fills a major niche.
If you want to learn more about personalized health coverage, contact us today. At Semel Risk Consultants, we put the “care” back in healthcare.
