1. Short-term health insurance can be a good temporary fix — Going without coverage entirely can get you into serious financial trouble. If you expect to have employer-based health insurance or coverage under your parents’ plan within six months, short-term coverage may be a good match for you.
2. Short-term health insurance is not comprehensive health coverage — Short-term plans typically don’t cover pre-existing medical conditions, prescription drugs, or preventive medical care. They generally do cover doctor’s visits, hospital charges, and emergency care. Think of short-term coverage as a back-up plan to limit your liability for certain medical bills in case of illness or accident.
3. Short-term health insurance can be easier to apply for — Applications for short-term health insurance plans are typically shorter and simpler than those for major medical individual plans. And once approved, your coverage may begin right away.
4. Short-term coverage is not guaranteed renewable — Short-term plans don’t provide all the same consumer protections major medical coverage does(2) and is not automatically renewable. This means you’ll need to undergo medical underwriting every time you want to renew a plan, and you could be declined if you develop a medical condition. Major medical insurance plans, on the other hand, are typically guaranteed renewable for as long as you need coverage.
5. Short-term health insurance can save you money, but won’t always cost you less — While premiums may vary, short-term health insurance isn’t necessarily any more affordable than individual major medical coverage. Work with a licensed agent like eHealthInsurance to review quotes from individual major medical plans and short-term plans in your area.
6. Short-term premiums may not be refundable in all cases — A traditional individual major medical plan is typically paid for on a month-to-month basis and may be cancelled at any time. Short-term coverage often works the same way, but if you pre-paid for six months of coverage and cancel after only three, you may not get a refund. Talk to a licensed agent like those available through eHealthInsurance to learn more.
7. Short-term health insurance should be a short-term solution — Short-term coverage is only what its name implies: coverage for the short-term. As soon as you qualify for employer-based coverage or individual major medical coverage, get it. Sooner or later, everyone needs broader protections.