Society of Certified Senior Advisors: 5 Instances Where You Need a Short-Term Medical Policy

Don’t be caught without health care coverage. How to find a short-term plan, when you’ll need it, and what to look for.

Anyone who hasn’t reached the age of 65 and qualified for Medicare runs the risk of needing a short-term health insurance policy at least once. Even people who are in good health are taking a big risk if they forego medical insurance. You could find out you have diabetes or get injured or discover a lump that is cancerous. Paying out-of-pocket can be debt-inducing to the tune of hundreds of thousands of dollars, particularly without negotiated prices from an insurer.

Travel Insurance

Medicare is always confusing, and coverage while you are outside of the U.S. is no exception. Find general rules for Medicare coverage outside the U.S. but be sure to check your policy since Medigap and Medicare Advantage plans may offer additional coverage. Medicare does NOT cover the vast majority of health care while you are outside of the U.S.

While you may have a credit card that offers protection against delayed or canceled trips, travel health insurance will still be needed. Check if a policy excludes adventure activities such as hang gliding or scuba diving and look for an insurer that will make payments to hospitals directly. Also check if you need medical evacuation insurance, especially if you’ll be traveling to remote areas. IMG is the top-rated travel insurer by reviews.com; check their complete list of top travel insurers.

Enter short-term health insurance, also known as short-term medical, to offer some protection when you don’t have an Affordable Care Act (ACA) plan. These policies last from 30 days to a year and are subject to state regulation. Although there are plenty of things they don’t cover, it’s better to have some sort of plan than none at all. Here are times when short-term medical might be right for you:

You missed the time period for open enrollment. The ACA offers guaranteed well visits, price limits, and subsidies to most beneficiaries. But if you are past the enrollment period and you don’t have a qualifying life event (marriage, divorce, an additional child, surviving domestic abuse or a move) then you won’t have to spend a year with your fingers and toes crossed. A short-term plan will give you some peace of mind and help pay for unexpected expenses.
You or your spouse retired early. If you retire before you turn 65, you may need coverage. You may be covered under COBRA (Consolidated Omnibus Budget Reconciliation Act) from work but going on it is a big mistake since it is not considered qualified coverage and full underwriting is required for any Medicare supplement policy. Consider a short-term plan to fill the gap but check with a Medicare office first (try your state’s SHIP services) to make sure it qualifies. Or your spouse is eligible for Medicare, but you won’t be 65 for a few months. Just remember that a short-term plan may not be available if you have pre-existing conditions.
You have a gap in employer coverage before you start your next job. When you are between jobs, it’s easy to try and save money by doing without health insurance. But is that a risk you can afford to take? A short-term policy will get you through until you’re employed again, and help you sleep at night in the meantime.
You’re in an employer waiting period. You’ve got a new job, but your employer makes you wait up to 90 days to get on their health coverage plan. Don’t go through this orientation period without any insurance.
You qualify for special enrollment but are waiting for coverage to start. If you’re getting married or divorced, moving, have added a new child to your family, are a survivor of domestic abuse, or are in certain other circumstances you can enroll in the ACA outside of the enrollment period. Usually, you have 60 days to get health insurance, but this coverage may not start immediately. If you sign up in the first 14 days of the month, coverage will begin the next month. But if you sign up in the last 15 days, you won’t be covered for a month and a half.

You can sign up for short-term medical and coverage can begin as soon as the next day. Most plans don’t require you to see network providers, although you may receive a discount if you do. Short-term insurance often is considerably cheaper than major medical premiums, and they usually cover inpatient and outpatient hospitalization, emergency room visits, surgery, ambulatory services, and intensive care once your deductible is met. Some plans even cover accidental death and dismemberment.

However, a short-term plan won’t cover preventive health care or pre-existing conditions. Short-term insurance does not have coverage requirements, so plans vary widely. Be sure to check the plan over carefully to see what is offered.

It’s also wise to research a company’s National Association of Insurance Commissioners (NAIC) complaint score. The site offers the number of complaints by code, index, state, licensing, and financial categories. Still wondering where to start? Check out this article on four of the best short-term health insurance companies. Finally, just as with any other insurance you buy, check the longevity and track record of the company you’re buying it from. If the company goes out of business or can’t pay its debts, you essentially have no coverage.

Most of the time, getting health coverage through work, the ACA, or Medicare is the best bet for most of us. But if you experience a gap in coverage, a short-term policy may be just what you need to avoid a daunting medical bill. Compare a variety of plans and determine how high your deductible should be. Then research the track record of the company you plan to go with before you buy. Short-term coverage can give you peace of mind and sure beats taking a big risk on your health.