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Health > Short Term Health Insurance

If you are in a state of transition, perhaps employed part-time, graduating from college, or leaving home for the first time, a short-term health insurance plan may be what you need to save your hard-earned dollars. A change in your job or schooling status may make you eligible.

The insurance industry has experienced high levels of competition, driving the cost of short-term coverage to record lows. It is designed for healthy individuals and families that are in need of a low-cost solution in case of illness or injury. Plans vary in the benefits they provide, but most policies make $1 million or $2 million available per person.

Short-term health policies are rarely available for longer than 12 months, though new plans are providing coverage for up to 36 months. It is typically bought in single monthly increments, making it convenient to stop the policy at the end of each month.

The drawback to these policies is that no pre-existing conditions are covered. If you had any symptom or condition for the 36 months prior to your coverage, your claim can be denied. It is important to sit down and carefully read through the lists of limitations and exclusions to verify that your needs will be met.

Who needs short-term health insurance?

Short-term health insurance is most popular among part-time and temporary employees. Many employers won't cover part-timers, so if you're in this situation, short-term health insurance may be the solution for you.

If you find yourself between jobs, you'll be joining many other likely consumers of short-term health insurance. Many people between jobs can choose to continue their previous coverage under COBRA for up to 36 months, but premium costs to maintain a corporate plan are usually extremely high.

Recent college graduates look for jobs offering some sort of health insurance benefits, but until a job is secured, often taking some time, coverage is needed. Short-term health insurance can serve this need. Or, if you are not enrolled as a full-time student and you're about to be dropped from your parents' plan, short-term health insurance could be for you. It will keep you insured until you find a job that offers health insurance benefits or until you find an appropriate individual health plan.

How does it work?

Often short-term health insurance plans work like indemnity , or fee-for-service, plans. You can visit any doctor or specialist you like, but most plans require pre-certification.

Surgery, hospital stays, emergency costs, diagnostic tests, and prescription drugs are all included under most short-term health plans. But, because of the low premium rates, you usually won't find that preventative care like physical exams and immunizations are covered.

As mentioned above, it will only cover new conditions, and pre-existing conditions from a period of up to three years before you enrolled for coverage can be considered as grounds for claim denial. If you renew your short-term policy, any claims filed on your previous policy can now be looked upon as pre-existing conditions.