How Does Short Term Health Insurance Work?

Discussing Short Term Health Insurance Coverage

Taking a short term coverage plan while in between jobs or graduation is an affordable means of maintaining medical aid for a specified term. The plan can be purchased to cover periods between 4 and 11 months depending on the requirements of the policy holder.

How does it work?

It is important to learn the benefits of a short term insurance plan that best fits with individual needs. Specific forms of coverage may not meet federal requirements for minimum healthcare and as a best practiced should be determined before a policy is purchased or one could face hefty penalties.

Short term coverage consists of different types of insurance which can be adapted with changing needs within a specific period of time. In this form it is suitable for individuals who may be changing employment and do not wish to be without coverage in the mean time.

It is also beneficial for those who may have reached an early retirement and need a quick and easy solution for the maintenance of medical coverage. It would be helpful at this time to understand the options available to you, and learning about the effectiveness of particular policies.

In comparison to a regular policy, the shorter term contracts are only required for a specific period time. This assists a large number of consumers in the management of risk that is associated with medical emergencies, the costs of chronic medication, and related health needs. The temporary plan does not have to adhere to the typical standards.

Plans can be purchased directly from an insurer online or over the phone. Here are a few highlights for its short term flexibility:

  • Deductible and standard of medical aid that are offered.
  • This includes approved doctors and hospitals within a particular region
  • The choice of a deductible for a policy that can be afforded
  • Hospitalization, regular doctor visits, and medical assessments
  • Up to 80 percent in a long term plan will aid in settling the costs associated with prescription medication and other types of healthcare

Top things you need to know if you have a short term health plan

You are not protected from tax penalties

  • You get affordable care for a short period of time But, they don’t meet the standards of the Affordable Care Act. You may be subject to a tax penalty for being uninsured regardless if  you have a short term health plan.

Standard health insurance may cost less than what you thought

  • Standard health plans offer more benefits therefore are typically more costly. However, if you earn about $46,000 for a single person, you could qualify for a subsidy to reduce your monthly payments.

Compare and shop for the best plan

  • Open enrollment is only one time per year. Find out when these dates are. If you miss out you will not be able to get back in until next year when it opens again.

There is no guarantee with short terms insurance

  • You must apply again and again when it comes to renew.

You like filing claims? You will have to with short term insurance

  • Major health insurance plans everything is handled with the provider.

Take Aways

When your short-term health plan ends, you won’t automatically be able to buy a major medical health insurance plan. Without a qualifying life event, you’ll have to wait until the next open enrollment to be guaranteed access to health coverage. View the image below for detailed comparison between Major Medical Plans and Short Term Plans.

In summary: You may get lower premiums with short term plans, however you will sacrifice additional features that most people have and take advantage of in a long term plan such as the additional out of pocket expenses. On the other hand with Obama Care many people are experiencing high out of pocket expenses via meeting their deductibles.

The Pros and Cons of Chicago’s Personal Health Insurance

Individual health insurance is one way to protect yourself against unexpected medical emergencies which can quickly drain funds and savings especially if long term care and therapy is required. Even more frightening is the idea of income suddenly being derailed because one can no longer go to work because of a medical condition. Under the Affordable Care Act (ACA), a person can buy individual health insurance through public exchanges rather than buy private exchanges dealing outside of the ACA marketplace.

Public exchanges were designed to address the growing number of uninsured or underinsured. More than 50% of the uninsured are expected to get free health insurance while some will get financial assistance on out-of-pocket costs. By 2016, around 20 million will no longer have to get public exchange although those exempted may still get coverage under a unique enlistment.

To a certain extent, public exchange has been successful in addressing the problem of uninsured and underinsured in spite of the many controversial and debates since 2013 – the year the enrollment started.

With Medicare, you still have to meet certain requirements to get adequate medical attention. Unfortunately, Medicare will not cover many long term care. In fact, less than 50% of nursing home costs and only 2% of nursing home accommodations are covered by Medicare.

Another significant change with today’s individual health insurance under ACA is that anything restorative must be deemed crucial. If you need something cosmetic, you will have to buy from the private exchange.

Under the public exchange, there is a minimum coverage that should be bought into during the open enlistment period. The only way to avoid this would be to fall under the exemption rule. Unfortunately, for many, the cost of health insurance under ACA is staggering with high deductibles. Under ACA individual health insurance, one is also pressured to buy well-being as well as pay for new fees when processing claims.

Those who did not buy the well-being insurance last January and those who did not buy into it because they did not meet the requirements of the Federal Poverty Level cutoff face additional problems.

On the other hand, individual health insurance through private exchange, which is not as popular, offers more flexibility and promise. Not only can it provide for all your possible emergency and preventive needs, it is considered by insurance experts as the road towards recovery for the insurance industry.

As you can see, the pros and cons of the ACA and private exchange is confusing and messy. It boils down to choice. With private exchange, you have more options and can customize your health insurance better but you could end up having to pay higher rates. In exchange, you can combine other insurance needs into a multiple benefit plan.

With ACA and its multiple carriers, you also have choices but the features are pre-set to follow certain criteria and price ranges. It is, however, designed to be user-friendlier than working on a private exchange individual health insurance plan.