Short term health insurance is a good option if you resign your job. This will cause the coverage that is provided by your employer to cease. You may end up with a gap in health insurance coverage before a new job is found. If you or a member of your family becomes sick or gets injured, then the cost for medical care will be expensive. These costs will need to be paid out-of-pocket and can deplete all your savings in a short period of time.
Alternative to COBRA
You can obtain health insurance to plug health insurance gaps that may be cheaper than the cost to pay for COBRA coverage. Premiums for COBRA are often high and are often more than an average person will receive in temporary unemployment. If you do not have extra money to pay for COBRA coverage, then a short term solution is the best option.
Benefits of Insurance
Health insurance that is purchased as a short term solution is available for a minimum of one month to a maximum of six months. The coverage provided by your policy will cease when the policy term ends and cannot be renewed. If you are still unemployed, then a new policy will be needed and there may be a waiting period. Individuals that have short term health coverage will be covered for any doctor's visit, diagnostic tests, complications due to a pregnancy, and hospital charges.
Purpose of Insurance
Policies for short term health coverage is provided for accidents and illnesses that are unexpected. Your policy is not designed to meet the needs that are provided by permanent health insurance. A policy does not pay for any type of preventative care and not the best option if a pre-existing condition exists. Most of these types of policies do not pay for maternity care or cover individuals that are currently pregnant.
Policies that provide short term health coverage will range from a low of $200 up to $2,000 or more. A policy may also require a co-insurance payment after the deductible has been paid. This can be as much as 50 percent or more of a covered cost. You may need to pay co-insurance up to a specified amount on the policy before insurance pays 100 percent of the costs.
The premium that is paid for a short term health insurance policy depends on various factors. Your age and the type of coverage available on a policy are used to determine the premium. You may purchase a policy for you or for any dependent that is 15 days old up to age 65.
Policies for short term health coverage will vary based on available coverage and price. Make sure that you understand all of your out-of-pocket costs before buying a policy. You may find that the deductible applies for each doctor's visits or to the whole policy term. Read through the types of covered expenses that are provided by each policy and the amount that will be paid.
By Andre Bradley