Health insurance today is a mess. We need it but can we afford it? We have our car insured, why not the family? “I hope nothing happens to me so I won’t need to go to the hospital.” These are all notions we have as concerned people and parents. Healthcare is on the rise as well as premiums. COBRA is expensive but if you have health conditions it is necessary. Are you a little overweight or smoke? All of these are factors for getting or not getting health insurance. What can you do in the meantime while you think about it or lose the weight or quit smoking or maybe you are even between jobs?
A little known policy lingers out there you may or may not be aware of, and that is the Short Term Medical plan. The plan is self explanatory as it is set for a period of time. The plans that we service go from anywhere between 30 days all the way up to 360 days of coverage. That means that you can have coverage for a month or two or even six months up to a year, the choice is yours. Short term medical plans are temporary plans and are not meant to be permanent. Think about it this way in that you don’t have health insurance doesn’t mean you don’t or won’t have health problems. The short term plan is a way to get coverage for a temporary fixed amount of time.
Why Short Term Medical?
Short term medical can ease the pain of not having health insurance for different reasons. A popular reason why people use STM is because they are in-between jobs. The person had coverage here and is now unemployed, the insurance stays with the job, now they are without coverage. Maybe you are in a waiting period of 30-90 days but do not want to take the risk of not having any coverage at all. Waiting periods occur with group coverage and the employer basically wants to make sure you are worth it to offer medical coverage to.
When you have children that are reaching of age to where they come off your plan. Usually this is when the dependent is going off to college or graduating college. You want your dependents to have health insurance but don’t know what is offered in that state or maybe the health coverage does not travel well. The STM is a viable option for those in need and it is probably ranked number 2 in why the STM is used.
So many Americans are part time or temporarily employed as well as laid off and health coverage is not available to them. The STM is a way to get coverage fast and not have the burden of huge premiums lingering over their head. Remember the STM is for temporary coverage just like the person is temporarily unemployed, when you get on a job that offers coverage you just simply cancel.
COBRA is the alternative when you leave a job, get fired etc. but it can be expensive. If you have preexisting health problems, COBRA is probably your only alternative as you can roll that condition into an individual policy after 18 months of coverage. If you are a healthy individual, you don’t need to go on COBRA you could instead while looking for another job pick up a short term plan to get you through till your plan at your new job is available to you.
How it Works:
Typically the short term medical plan gives you the freedom of choosing any doctor or hospital and has a deductible for individual as well as the family. Once the deductible is met, then the plan kicks in up to a specified amount such as 2 million dollars. You will have an option of coinsurance benefits as well; this is the 80/20 split or 50/50 split. The coinsurance is limited to either the first $5000 or $10000 respectively depending on which plan is offered and with which company. After that is met, the plan should pay 100% of covered expenses. Pretty simple: you go to the hospital and pay the first $250 then depending on which plan you selected it will pay 80% of the next $5000 in charges which leaves you with $1000 and 100% after that. So if you had a whopping bill of $15000 of covered expenses your bill would be $1250!
The qualifications to apply for STM plans are limited. Typically anyone under 65 years of age and children under 19 or 25 if full time student qualify. There are limited questions with the application process, for example 7-9 questions to answer. Height and weight is not a factor in most plans, so if you are struggling with weight problems in the meantime you would qualify for short term medical plan. Be advised that these plans do not cover preexisting conditions and if one of them says they do, make sure you read it carefully. You can even just get your child covered maybe before they are eligible for your group plan or state plans.