For most individuals whose access to traditional health insurance has been interrupted — due to a layoff, job change, a move to another state or similar event — temporary health insurance may be a viable alternative. In fact, it can be a lifeline for these people’s budgets during some of life's common transitions.
Who Needs Temporary Health Insurance?
The good news is that most Americans have health insurance. In spite of the numbers often cited in the current debate over healthcare reform, the vast majority of adults in the United States are covered through their employers. Another large group, those older than 65, are covered by Medicare. A smaller percentage buy their own individual policies. But any of these situations can change at a moment's notice, making temporary health insurance a valuable option.
Temporary health insurance can help a person bridge the gap if:
- He is between jobs due to a layoff, downsizing or simple career change ?
- He has just graduated college and is no longer eligible for coverage under his parents' policy ?
- He is changing jobs and looking for a lower-cost alternative to COBRA ?
- His temporary, part-time or seasonal job doesn't offer health insurance ?
- He has started a new job but is still in the waiting period before employer-sponsored coverage kicks in
A person in any of these situations may be tempted to save money by going without insurance, especially if his lack of coverage is only for a short time. But accidents can happen to anyone at any time. A temporary policy offers crucial financial protection against the possibility of a large hospital bill. In addition, if an individual is diagnosed with a serious illness while uninsured, it can be very difficult for that person to obtain traditional insurance coverage later.
What Does Temporary Health Insurance Cover?
Temporary or short-term medical insurance usually offers coverage that is very similar to a regular individual health policy. Depending upon a person’s state of residence, he can apply for 30 to 365 days of coverage for physician services, inpatient hospital stays, inpatient and outpatient surgeries, prescriptions, X-ray and laboratory services, skilled nursing facility care, home health care and rehabilitation, to a lifetime maximum of up to $2 million.
Temporary health insurance plans generally offer a wide range of deductible and copayment options from which to choose, so the insured can pick a plan suited to his needs and budget.
Who Is Eligible for Temporary Health Insurance?
In general, healthy individuals under 65 and their dependent children through age 18 are eligible. Dependent children who are full-time students may be eligible through age 24. Foreign nationals with legal documentation who are living in the U.S. for at least one year may also be eligible.
Pregnant women, people who will become eligible for Medicare during the policy's benefit period, and those who would likely be declined for an individual health policy are usually not eligible for temporary health insurance. These policies do not cover pre-existing conditions.
Because temporary health insurance is designed as a short-term protection against the risk of a sudden illness or injury while the insured is between permanent health plans, these policies also do not include benefits for preventive care, routine physicals, dental services or vision care. Short-term medical plans are not automatically renewable, but the subscriber can usually apply for a new policy at the end of the original term if he needs an additional short period of coverage.
How to Find Temporary Health Insurance
Many insurance companies sell short-term medical policies. The insurance shopper can research many of them on the internet, where literally hundreds of websites offer information on temporary health insurance and free rate quotes. But it is important that each individual does his or her homework. Before selecting an insurance carrier via the internet, check with the state department of insurance to be sure the company is licensed and with the Better Business Bureau to see if any complaints have been lodged against it.
As an alternative, ask a local health insurance agent to provide a quote and more information. An independent agent can help compare carriers to be sure the customer selects a company that is financially stable and has been in business long enough to give him or her security and peace of mind.
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