Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com.

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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The lowdown...

  • Short-term health insurance is meant to cover catastrophic health situations that would otherwise financially devastate you
  • It does not cover many other health conditions and does not cover pre-existing conditions
  • You must renew it typically once every six months, and it is limited in what it covers
  • Read the fine print when you shop for health insurance and compare plans to get the best deal for you

If you are shopping for health insurance coverage and have considered getting a short-term health insurance plan, you may want to do some more research on this. Short-term health insurance seems to offer a temporary fix for people who are uninsured, but it is not meant to be a long-term solution to your health insurance needs.

What is short-term health insurance?

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Short-term health insurance is a limited coverage health insurance for people who do not currently have insurance. The idea behind getting this type of coverage is that “some is better than none.”

While it is true that you are better off having some insurance than none at all, there are some things that you should know regarding short-term insurance.

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Facts about Short-term Health Insurance

One important thing that consumers should know about short-term insurance is that it does not meet the minimum essential coverage requirements under the Affordable Care Act (ACA).

However, it is important to note that, with the new Presidential Election behind us, Donald Trump has planned to replace Obamacare that is under the Affordable Care Act and replace it with something better. So it will be important to keep up with how that will affect your options and rates.

Most experts agree that the new plan will be much better than the previous plan and will offer customers far more choice in their health care since Donald Trump has made a point that he wants the customer to have more choices with less control left to the government over health care options.

Short-term health insurance is only something you should consider as a temporary plan that will get you by if something were to happen to you in the interim while looking for long-term insurance.

Don’t think of it as a full range health care plan. It isn’t. But it does offer some temporary assurance that you will not be caught without insurance should some catastrophic accident, injury, or illness leave you without coverage.

Short-term Health Care Limitations

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While you are waiting to see how the new administration may make changes to the current health insurance options, you could get a temporary short-term health care plan in the interim. You should be aware of these factors when shopping for a short-term health care plan.

  • Coverage is limited Short-term health insurance is limited to a six-month period in most cases. It may also be limited in the types of illnesses it covers. Be sure to read the fine print on any short-term plan so that you will be sure you know what you are getting.
  • Open enrollment for major medical only comes once per year If you are going to get in on the open enrollment for the current year, you must enroll by February 15, 2017. So you should begin shopping now for a suitable plan.
  • Short-term health insurance is not guaranteed Unlike many other major medical health insurance plans, short-term insurance is not guaranteed. This means that you have less security in knowing that you are covered.
  • Major medical may cost less than you think – Major medical has always been considered the most expensive type of insurance. However, compared to what you may end up paying in out-of-pocket expenses, you may be better off shopping for a more permanent type of insurance rather than trying to use short-term coverage to fill the gap.

Limitations of Short-term Health Plans

Short-term plans usually limit your coverage to six months at a time. After that period, you will be required to repurchase your coverage for another six months.

So this is another disadvantage to purchasing a short-term health insurance plan. You may have to repeatedly renew or repurchase your plan. There is also a risk of forgetting to renew it if it is not set up on an automatic renewal plan.

In addition to this, many short-term insurance companies limit how often you may repurchase the same coverage, leaving you to scramble to find long-term coverage in order to get the coverage you need. You never want to find yourself in a situation where you are scrambling to try to get insurance “in a hurry.”

You should do it now, while you have time to think about the various benefits and disadvantages while comparing the different plans. Also, if you wait until you have an illness or injury, you will likely not qualify for any of the short-term plans because they do not cover pre-existing conditions.

It could be easy to find yourself in a “Catch 22” situation if you are not careful. So make sure and do your homework now to save yourself big headaches later.

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Advantages of a Short-Term Health Care Plan

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The following are considered the best reasons to consider a short-term health care plan if you find yourself without coverage.

  • Low-cost health insurance The main reason people tend to go for a short-term health insurance plan is the lower cost. Since it only covers a limited number of situations and illnesses, you will not have to pay the full price for coverage that you would with a major medical insurance plan.
  • Fast approval (one day or less) Another big advantage to having this type of plan is that you can get approved quickly, usually in one day or less. If you are ever in a situation where you have no coverage, it’s a quick and easy way to get temporary health insurance for catastrophic coverage.
  • Helps bridge the gap between policies If you are between policies due to quitting a job or going into retirement but before the age of 65, you may want temporary insurance to fill the gap.
  • May provide a good temporary solution Short-term health plans may provide a good temporary solution for your health insurance coverage while you are shopping around for more permanent coverage.

Disadvantages of a Short-Term Health Care Plan

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As we have alluded to before, there are disadvantages and limitations to a short-term health care insurance plan. Some of the most concerning reasons are listed below.

  • Does not cover pre-existing conditions – One big problem with short-term insurance is that it does not cover pre-existing conditions. So, if you have any ongoing health condition, you may not get coverage with a short-term health plan.
  • Does not provide essential health benefits – Another problem with these types of plans is that they do not offer essential health benefits. Some do not allow for extended hospital stays or pay for any extra therapy or medicines for your illness or injury. This is a big disadvantage since you never know what type of situation you might face.
  • Focuses on catastrophic coverage only If you have a major catastrophic illness such as cancer, a heart attack, or accident of some sort, short-term health insurance can save you from a financial disaster from having to pay these medical expenses out-of-pocket.
  • Limited selection of doctors – Under temporary health insurance plans, you will likely be limited on the selection of doctors that you can use.
  • May prevent you from getting COBRA or HIPAA compliance or assistance COBRA and HIPAA are two government programs that may offer you assistance in a health crisis. HIPAA also provides you with the assurance of confidentiality of your medical records and other protections. You should check with your short-term insurance provider to make sure this is provided under your plan before agreeing to the terms.

Why major medical if I am healthy?

One of the arguments many people adhere to when considering health insurance is that there is no need to get major medical coverage is you are healthy. The problem is that, regardless of age, occupation, lifestyle, or other factors, no one knows what situation they may find themselves in with their health tomorrow. You know how you are today, perhaps. But tomorrow or next week, you may find yourself in need of medical care.

If you have no major medical coverage, you may be in a bad financial situation where your only choice is to forego treatment or accept a “charity case” situation from your hospital.

Major medical covers a broad range of health conditions and situations that you have no way of knowing that you might have in the present time. It keeps you from having to pay these expenses from your pocket, which could typically bankrupt the average person in one week or less.

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The Costs of Medical Care

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It may help some people to realize what the costs of medical care are. They are often surprised to find out how much something costs when it comes to medical treatment.

One surgery alone can cost over $50,000. The average minor surgery is probably around $15,000. Tests, lab work, and consultation can be upwards of $3500–5000 or more. This all depends on the doctors and hospital facilities, their policies, and other factors.

But any way you cut it, you are facing devastating financial costs without insurance. Major medical is the only type of insurance that covers it all. They typically pay up to 80 percent of your total costs, leaving you to pay only 20%.

What happens to someone if they are uninsured?

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Doctors, nurses, and other health practitioners are in the business of helping people. For this reason, they rarely refuse any patient that cannot afford medical care. If someone is totally uninsured, the hospital may count it as a “charity case.” In this case, you would not pay anything. However, it is not the best situation, and it is not one you want to find yourself in.

This is because they will often pick and choose the types of services they will give to such a case since they are not getting paid for it. Hospitals lose money and doctor hours by dealing with charity cases so they will be limited in how many they can take and the types of services they can provide.

If you are in a low-income bracket, they may bill you for only a minimum amount of treatments or services that they render to you. This is always up to the discretion of the hospital or doctor who is in charge of your case and the responsibility often falls to the hospital administrator.

The Best Solution for Health Coverage

Despite the temptation to hope for the best and go without coverage, it’s not worth the risk. Medical expenses are extraordinarily high. Without coverage, you face having to pay for these expenses out of your bank account. With costs as high as they are, it could bankrupt someone.

Don’t risk it. There are plenty of options for health insurance that you can look into.

Short-term health insurance is a fair option if you have no other coverage, were recently laid off from work where your primary insurance was, or if there are other extenuating circumstances. But it is not something that you will want to rely on as your primary health care insurance.

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Shop and Compare to Find the Best Deal

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Just like anything else you need in life, the best thing you can do to protect yourself and your family from catastrophic health costs is to shop around. By comparing companies and policies and weighing all of the options between short and long-term health insurance, as well as major medical and supplemental insurance plans, you will have a better idea of what you need.

You should investigate the policies to make sure they cover what you might need in any situation so that you will be ready for anything. This should include hospital stays, doctors’ fees, x-rays and lab work, referrals to specialists, and other services.

Insurance is for the purpose of covering the unexpected situations. It’s something we carry to “insure” us against financial disaster at a time when we least expect it. Even a broken arm or a burn, a slight accident, or a cardiovascular test may cost far more than you can pay.

Long-term health insurance provides you the assurance that you will be covered in any situation that you might find yourself in. Of course, when we say “any situation,” you still need to read your policy carefully because no two policies are exactly alike. They do not cover the same thing. So it is important to understand the differences when you are shopping for health insurance.

Like any other type of insurance, ou can find the best plan by considering your overall risk factors such as:

  • Age and general health
  • Risk factors like genetics and lifestyle
  • Risk of accident or injury
  • Prior medical conditions

All of these factors can point to some idea as to what your overall risk is. At the very least, however, you should have medical insurance to cover:

  • Doctor visits
  • Prescription drugs
  • Follow-up referrals
  • Exams and lab work
  • Tests and procedures
  • Hospital stays

Talk to an Agent

Consult with an insurance professional that you trust to see what you should do to find the best plan. If short-term insurance is a good move for you temporarily, then do it. But remember that you are going to be limited in your coverage for these types of plans and it does not meet the current government expectations of health coverage.

Changes are Coming

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Things are likely to change under the Trump administration, and it’s possible there may no longer be a penalty for having insurance. However, it is still important that you carry the right health insurance coverage to protect yourself and those you love for those times of uncertainty.

Feel free to shop and compare on our site and talk to a representative for a free quote. That’s a great place to start. Someone will help you look into your situation to see which coverages are best for you.

Everyone is unique. That’s why we offer this site so that people like you can be informed and make a more educated decision on your health care plan, for those unpredictable times in life.

Find health insurance today by entering your zip code below and comparing free online quotes!