For many Americans, short-term insurance plans have become an attractive and useful alternative for affordable and comprehensible health insurance. Also known as Temporary or Term health insurance, these plans offer coverage for short periods of time. However, they might offer more limited protection in some cases. As a result, short-term insurance might work for some of us, while regular health coverage may be the best for others.
Before deciding to opt for temporary coverage, we need to understand what exactly short-term insurance is. We also need to know what temporary insurance covers, and more importantly, what it doesn’t. Lastly, we must be aware that short-term insurance is not meant for everybody, and we will go over who should consider this type of coverage.
Short-term insurance plans are a new alternative in health insurance, which offer coverage for short periods of time. Coverage under these terms usually goes from a couple of months up to a year. With most insurance providers, though, you might be eligible for renewing your policy after a term’s end. This would end up in three years or so of health coverage, again, depending on the carrier.
Even when temporary insurance might sound perfect for some, we must remember that these plans are not available in every state. Actually, the states of California, Hawaii, Massachusetts, New Jersey, and New York forbid the sale of short-term insurance plans.
Coverage under temporary insurance might vary greatly from one company to the other. This is because federal laws allow companies to create their own coverage plans without any mandates being required. Thus, some short-term plans might cover mental health and substance abuse treatment, while others may not.
In 2018, the Kaiser Family Foundation analyzed different short-term health insurance plans in terms of coverage and protection. The KFF found that:
- 43 percent do not cover mental health services;
- 62 percent do not cover substance abuse treatment;
- 71 percent do not cover outpatient prescription drugs; and
- None of the plans cover maternity care.
This is why it is important to read the fine print and ask as many questions as possible when choosing these plans. Finding an affordable insurance plan that suits our medical and financial needs can be hard but is not impossible.
Some might believe that short-term insurance is an alternative to medical coverage that can suit everybody, but it isn’t really true. We must do some research beforehand, and then carefully consider whether temporary insurance is the best option for us.
Opting for temporary coverage can be a great alternative, however, if we are between jobs or waiting for another plan to begin. This might also be an option for us if we are waiting to become eligible for Medicare. Filling up these and other coverage gaps is possible with short-term insurance. We just need to make sure it will cover our needs and we won’t find any issue.