Health Insurance for One Year
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UPDATED: Mar 19, 2020
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- Short-term health insurance policies typically have a limit on the amount that will be paid out for medical coverage, and they are capped at one year.
- After one year, the coverage must be renewed, and that process is not guaranteed as short-term policies are not subject to the provisions of the Affordable Care Act
- Premiums for one-year medical insurance policies are typically much lower than those offered by companies issuing them for a longer term
- Younger people are often drawn to shorter term policies that last for one year due to an uncertain employment situation and the lower cost
- One-year policies do not usually cover maternity care and other essential health benefits that individual health insurance policies are required to under Obamacare
Even with the passing of the Affordable Care Act, essentially mandating that all Americans have health insurance, millions of residents are still without a sufficient long-term policy. As an alternative, many people are opting for short-term health insurance policies that only last for a year.
When you are considering getting a one-year medical insurance policy, these are just a few of the factors that you will want to consider. There is some more helpful information about this topic that we will now cover below.
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Benefits of a Purchasing Medical Insurance for One Year
One of the primary advantages of short term health insurance coverage is that they can be purchased at any time of the year. This means that one does not have to wait for the open enrollment period of Obamacare era insurance policies.
Coverage can be obtained at any time and will last for the duration of the term, at which time an application for renewal can be lodged. This means that people in any given circumstance, financial or otherwise, will be able to apply for a medical insurance policy lasting one year.
Many people have been unhappy with the rate at which premiums for long-term health insurance policies have increased. One year, shorter term, policies are typically much lower in cost.
One example is a short-term policy in California right now can be found for around $180 a month. This is usually much lower than what an individual would expect to pay for a health insurance policy purchased through the Health Insurance Marketplace.
Many people also appreciate the reality that the network of providers with a one-year health insurance policy is much broader than what is found with other types of insurance. This gives the one-year medical insurance policy holder much more flexibility in regard to his or medical care as more than one physician can be used.
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Some Pitfalls Related to One Year Medical Insurance Policies
One of the more highly touted of healthcare reforms under the Affordable Care Act was the provision forbidding insurance companies from denying coverage on the basis of preexisting conditions. This essentially guarantees that nobody can be denied coverage.
The exception to this rule is that short-term policies do not have to abide the the provisions contained in Obamacare. They can exclude preexisting health conditions, and they usually do.
The Affordable Care Act also contains a series of essential health benefits that must be provided to every individual with long-term health insurance, an example benign immunizations and maternity care. If you are pregnant, for example, a one-year medical insurance policy company would not be required to cover any childbirth-related expenses.
While some health insurance policies that are purchased for one year will provide individuals with prescription drug discount cards, in addition to physician discounts, these are not enough to offset the typically higher cost of services overall.
Short-term insurance companies are also not obligated to renew policies for any individual, regardless of medical condition or circumstance, so that is something to keep in mind as well.
Is a one-year medical insurance policy best for you?
Given the advantages and disadvantages of a one-year medical policy that were just mentioned, you might be rightfully wondering is such a plan is in your best interest. There are actually many reasons why you might be pursuing such a short-term policy, but few of those will be long lived.
Perhaps such a medical insurance policy can help you get through a certain season in life until you are in a better position to obtain longer-term coverage. That being the case, consider the following points before making your final decision:
- One-year medical insurance policies typically require individuals to file their own claims, meaning you may need to prepare paying out-of-pocket for certain medical expenses.
- Acceptance is not guaranteed when applying for any short term health insurance policy.
- You can apply outside of the open enrollment period, so such a policy might be helpful if you have missed your opportunity for a longer term health insurance plan.
- Long-term health insurance, with available subsidies included under Obamacare, may be cheaper than you have been lead to believe.
- Short term health insurance policies of up to one year do not exempt you from the tax penalties imposed under Obamacare, so this is something to keep in mind as well.
That last point is something to highlight. Absent a comprehensive health insurance policy, Obamacare does provide that a tax penalty be levied against most adults who fail to secure insurance.
One-year policies do not exempt you from this requirement. The penalty plus the cost of a short-term policy is often more than a comprehensive policy would have been in the first place.
Medical insurance for one year is certainly better tan no insurance at all. Some of the reasons that people opt to consider such a policy can include:
- Lack of employer-sponsored insurance policies
- Premiums for comprehensive coverage are deemed too expensive at the moment
- Open enrollment period has passed
Keep in mind that there are other options out there, such as remaining on your parent’s policy if you are under 26 years of age. Regardless, if you do get a heath insurance policy for one year just remember that there are limitations.
If you are approved, however, you can expect to receive the benefits stipulated in the policy terms and conditions. With that in mind, make sure you compare short term policies in your area in order to purchase the right kind of coverage for your situation.
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