If you find yourself in between jobs, you have already discovered that finding affordable Health insurance is no easy task. While COBRA provides you the right to continue your previous employer’s coverage, the monthly premiums can be downright unaffordable.
Many people find Short-Term Health insurance, also called Temporary insurance, to be an affordable alternative to COBRA. This coverage helps bridge the gap between having an employer-sponsored plan and waiting for your next job.
Leaving a job often means leaving Group Medical coverage behind, a risky move if you don’t have other insurance options. Short-Term insurance policies help remove the gamble, but they typically only protect against unforeseen sickness or injury. Pre-existing conditions are usually excluded.
Premiums for Short-Term coverage are usually much cheaper than the premiums paid for COBRA. However, the costs can still seem high for a person who just lost their job. It could be tempting to forgo insurance altogether, but financial security is the main reason people buy Short-Term Health insurance in the first place.
Without coverage, an unexpected trip to the hospital could send a person deep into debt. In fact, several published studies cite medical bills as a leading cause of bankruptcy. Short-Term Health insurance is designed to cover these catastrophic events.
Beyond financial protection, Temporary insurance can also help prevent future insurance claims from being rejected under HIPAA, or Health Insurance Portability and Accountability Act, laws. If an individual maintains creditable insurance coverage without more than a 63-day break in coverage, they are considered to have maintained continuous coverage, and exclusions for pre-existing conditions would not apply. This applies even if the Short-Term policy excluded coverage for those same pre-existing conditions. Approved Short-Term insurance policies are considered creditable coverage.
The terms of short-term medical plans usually run from 30 days to a maximum of one year, depending on state requirements. Some policies are designed to provide coverage for a specific number of days with premiums paid upfront, while other policies offer flexible monthly payment plans.
Since Temporary insurance is only designed to last a few months, policyholders still need to plan for a long-term solution. If you find a new job and enroll in your new employer’s Group insurance plan, make sure to find out when the new coverage starts. Although it’s not a long-term solution, people in transition should consider Temporary insurance as an interim solution to ease financial and healthcare concerns.