No health insurance, no problem, right? Not quite. Going without a health insurance plan is a risky proposition. You may be healthy and free of medical conditions, but the unexpected doesn’t wait around for a more convenient time. Injuries and illnesses happen, and going without health care isn’t always an option. Are you prepared to pay for potential medical bills entirely out-of-pocket?
Short-term health plans – more traditionally called “short-term health insurance” or “short-term medical” – can help protect your finances when you don’t have an Affordable Care Act (ACA or Obamacare) health insurance plan. You can choose for your plan to last between 30 and 364 when you enroll.
Some insurers will allow you to apply for additional new certificates of insurance for up to three years at a time. State rules may vary.
Though short term plans have their disadvantages – there are a myriad of things they don’t cover – in the following situations, it may be better for you to buy a short-term health plan instead of going the ACA route:
1. You Need to Fill a Gap Between Employer Coverage and Your Next Job
As the saying goes, hope for the best and prepare for the worst. Even if you think you’ll land a job with benefits right away, it is wise to secure temporary health insurance coverage.
When you are unemployed and in between job-based health insurance plans, it’s often tempting to wait it out and remain uninsured. After all, the strain of household budgets and health insurance premiums can break the bank. But so can unexpected medical bills.
Short-term health insurance premiums are often a fraction of major medical insurance premiums. Plans usually include benefits related to inpatient and outpatient hospital care, emergency room visits, surgical services, ambulatory services, and intensive care, among other things. Keep in mind, you will still have to pay your medical bills until you reach your deductible and cover out-of-pocket costs for copays on covered services. If you reach the end of your policy and still need coverage, depending on your state’s laws, you can typically apply for and enroll in a new policy.
2. You’re in an Employer Waiting Period
In some jobs, the waiting period before new employees become eligible for employer-sponsored health insurance benefits may be as long as 90 days. It could also be as short as a few weeks. Depending on your circumstances, it may seem reasonable to coast through your orientation period uninsured.
Why risk it? A single month of short-term health insurance can be well worth the premium—often one-third of what a major medical health insurance premium costs. Plan details such as deductibles and coinsurance can often be customized to your needs, and there is no waiting period to begin. Coverage typically starts within 24 hours after you pay your initial monthly premium.
3. You Missed Open Enrollment
Life gets busy. You may have put off making a decision or weren’t sure you could afford an Obamacare plan; then, before you knew it the Open Enrollment Period had ended. If you haven’t undergone a qualifying life event that makes you eligible for a special enrollment period (e.g., moving, getting married or divorced, adding a child to your family), you don’t have to spend a whole year uninsured.
Enroll in a short-term medical plan to get you to the next year, or until a change in circumstances allows you to secure major medical health insurance. Though short-term health insurance plans are not compliant with Obamacare’s requirements, this coverage can offer some peace of mind. Should you wind up in the emergency room or need an unplanned surgery, it’s good to have help paying for covered medical expenses.
4. You Qualify for a Special Enrollment Period but Are Waiting for Coverage to Begin
Turning age 26, getting married or divorced, adding a child to your family, being a survivor of domestic abuse, moving and certain changes in income are a few qualifying life events that could make you eligible for a special enrollment period. This typically allows you 60 days to secure Affordable Care Act health insurance, even outside of open enrollment.
Still, depending on when you enroll in an ACA plan, your start date could be more than a month away. If you enroll in an ACA plan the first 14 days of the month, coverage starts the next month but if you sign up on the last 15 days of the month, you’re not covered for a month and a half. For example, if you sign up on November 16, you won’t have coverage until January 1. Pick up a short-term health plan to stay protected in the meantime.
5. You Retire Early and Don’t Yet Qualify for Medicare
Why risk your retirement savings on paying for major healthcare expenses 100 percent out-of-pocket? If there’s a little time between your early retirement and your Medicare eligibility, consider buying a short-term health insurance plan. This happens most frequently when one spouse qualifies for Medicare but the other, younger spouse needs a plan until Medicare is available. Once you meet your deductible, your plan will help pay for additional covered expenses. It is important to note that temporary coverage may not be an option if you have preexisting conditions.
6. You Are Exempt from Obamacare
In most states, people are no longer required to buy health insurance. Still, don’t gamble with your future. Look into buying a short-term health insurance plan. While it will not cover preventive health care or pre-existing conditions, it will help with serious illnesses, injuries, hospitalizations, surgeries and other potentially costly medical care.
Because short term health insurance plans don’t often require you to see network providers — though discounted care may be available when you do — you can choose your doctors. Plus, most doctors and hospitals accept short-term health insurance.
You can easily apply for and enroll in short term health insurance online. It takes only a few minutes. And remember, depending on your needs, coverage can begin as soon as the next day.
Taking the Next Steps
It’s you’re in between major health plans, or looking for temporary health insurance to fill some immediate needs, it’s worth seeing what’s available in your area.