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Short Term Health Insurance

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Eric Stauffer is a former insurance agent and banker turned consumer advocate. His priority is to help educate individuals and families about the different types of insurance they need, and assist them in finding the best...

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UPDATED: Sep 10, 2013

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Short Term Health InsuranceAn unexpected injury or illness can be financially devastating to a person without insurance.  Even a simple emergency room visit can become prohibitively expensive for an uninsured person, and hospitalization and surgery can easily bankrupt someone who is not financially prepared.  This is why carrying health insurance is so important and why insurance solutions exist for people who may not be willing or able to purchase a complete individual policy.

For many people, health insurance is provided by an employer.  If the employment comes to an end, insurance benefits are likely to cease as well.  In this situation, the customer may wish to purchase a short-term health insurance policy to help fill the gap.  This policy can be obtained immediately and used for a few weeks or months until a more permanent health insurance solution can be found.

As its name would suggest, a short-term insurance policy is meant to be a temporary solution.  As such, it’s designed to provide medical coverage for unexpected costs and emergencies, not routine care.  Unlike a standard insurance policy, which will pay for preventative care, vaccines and examinations, short-term insurance pays only for sudden and unexpected expenses.

What Will Short Term Insurance Cover?

The specifics of any given policy will depend on the insurer, but in general there are certain things you can expect a short-term insurance policy to cover:

  • Emergency room visits for true emergencies
  • Office visits relating to illness or injuries
  • Outpatient surgery
  • Inpatient surgery and hospital stays
  • Ambulance rides
  • Some prescription drugs

You will usually be allowed to keep your current doctor, but most insurance companies will offer a discount if you use a provider within the insurer’s preferred network.

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Short Term Health Insurance Cost

Because short-term health insurance policies are limited in scope, they tend to be more affordable than the standard health insurance equivalent.  This is valuable as many of the people who need these policies may be between jobs or otherwise feel strain on their incomes.

Additionally, short-term health insurance policies tend to have high deductibles.  This keeps the monthly cost down and discourages customers from receiving unnecessary medical care.  Common deductible amounts for short-term insurance are $1,000, $3,000 or $5,000.

Who Should Consider a Short Term Policy?

  • People who are between jobs
  • Students and recent graduates who no longer receive insurance from their parents
  • Temporary and seasonal workers
  • Workers waiting to receive benefits from an employer
  • Non-residents visiting the U.S. for an extended period of time and who have a U.S. address

If you need a more long-term insurance solution, it may make sense to purchase a catastrophic health insurance policy or standard high-deductible policy instead.  These affordable insurance solutions will offer many of the same benefits as short-term insurance without as many limitations.  

About Eric Stauffer

Author: Eric StaufferI am a former insurance agent and banker turned consumer advocate. My priority is to help educate individuals and families about the different types of insurance they need, and assist them in finding the best place to get it.

5 Comments

  1. My wife will be 65 next year in May. So, we are looking for short term health insurance (catastrophic) which would likely have a high deductible but would keep us from going bust for 4 months should something out of the blue happen to her. She has no real pre-existing conditions. Born 5/14/1952. Non-smoker. Can you suggest anything ?

    Reply
    • Hi David,

      There are a lot of short term options out there, but they will vary wildly by state. You should be able to go on just about any broker website and find companies in your area that sell short term insurance.

      Just remember, short term policies do not fall under they same rules as the ones sold on the state and federal exchanges.

      Best,
      Eric Stauffer

      Reply
  2. Great information that I am finding very helpful. However, I am a federal worker (single female) and am looking for insurance that will allow me to pay my mortgage in the event of a long illness. As a federal worker I do get long term care benefit (for nursing home, nurse etc.) but nothing is offered that will help pay the bills.

    Can you offer any information on this type of insurance. Thank you.

    Reply
    • Hi Yvette,

      What you are looking for is disability insurance. It will give you cash while you are disabled (usually includes long-term illness as well). It typically caps out at 50-60% of your income, but its a very good safety net to have.

      The rules for disability insurance vary by state, but there will usually be what is called an elimination period. This is the amount of time that must go by before the insurance makes any payments. So make sure you have enough money to live off of during that time. Elimination periods are often 90 or 180 days.

      Also be aware of how long a policy can go for. Some states allow lifetime plans, while others limit them to a set number of years (5, for example). If you ended up with a life long injury that prevented you from working again, you can usually get on state disability.

      When I purchased disability insurance a few years back, I did so through zanderins.com. I am not affiliated with them in any way, but I think their business practices are good. They do not try and oversell people.

      If you have any further questions, feel free to let me know.

      Reply
    • One more note to add… You may want to explore critical illness insurance as well. Depending on the type of illness you get, there may be scenarios where disability alone will not cover it. Either way, it is important to read and fully understand a policy before purchasing it. If it is too complicated, paying a lawyer a flat fee to read over it and explain the details is probably worth it.

      Reply

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