With open enrollment upon us, chances are you’ve been feeling the pressure to select a marketplace plan. The government seems to be going all out for the new year with marketing materials including dozens of emails, phone calls, and social media posts. However, it’s important to understand that long term plans aren’t your only options. Short term health insurance can be a great alternative – as long as you understand some of the fundamentals.
The basics explained
Put simply, short term health insurance plans exist to help fill gaps in your healthcare coverage. Most often, this is when you’re between jobs that offer workplace insurance, are waiting for a policy to take effect, or are without insurance and are ineligible for a special enrollment. If you don’t qualify for workplace coverage, chances are your best option will be to either purchase a long term plan from the marketplace or enroll in short term health insurance while you compare different policies and levels of care.
It’s also important to know that, unlike many traditional insurance policies, short term health insurance often isn’t available for renewal, though this may depend on your state of residence. In some instances, you’re able to purchase back-to-back plans or even apply for another short-term period. However, as effective as short term healthcare can be, it does have its fair share of risks.
Understanding the risks
The first major risk of opting for a short term insurance plan is the lack of coverage for pre-existing conditions. Many short term plans have clauses and exclusions when it comes to providing care for existing medical conditions which can significantly impact the service you’ll receive. This stems from the fact that a good majority of short term insurance fails to cover the Affordable Care Act (ACA) essentials. If you need mental health or substance abuse assistance, for example, there’s a strong chance you’ll be footing the bill yourself.
On top of that, if you do need to rely on your insurance plan to seek care, short term health insurance often has higher monthly premiums and out-of-pocket maximums. Many of these plans even include dollar limits for how much short term insurance will pay out for total benefits. With the cost of healthcare these days, it’s unsurprising how quickly you might hit one of those limits. Even something as simple as visiting local urgent care services might cost you extra, especially if it’s not within a limited short term care network.
This fear regarding pricing and premiums relative to the benefits actually provided causes some buyers to forgo care altogether. Note that, while short term insurance certainly has some significant risks and drawbacks, temporary care is almost always better than no care.
The bottom line
If you’re experiencing a gap in healthcare coverage and need ongoing care, short term health insurance might be the ideal temporary solution. Before you commit to a plan, though, do some research on special enrollment periods. There’s a possibility that, if you lose coverage due to an extenuating circumstance such as unemployment or divorce, you may be eligible to purchase a marketplace plan outside of traditional open enrollment periods. Frequently, the care provided by a more traditional plan is more expansive and covers a wider array of conditions. While this doesn’t mean all pre-existing conditions will be covered, there’s a greater likelihood.
This doesn’t mean that short term insurance is a bad option in many circumstances. If you’re considering a short term plan to bridge gaps in coverage, make sure to do your research and compare several plans to ensure you’re receiving adequate care. As long as you feel confident in your selection, that’s what matters most.