Permanent Plans for Continuous Security
Most people want long-term health insurance, which provides continuous coverage and is renewable for multiple years (typically to age 65, when people become eligible for Medicare). Long-term or permanent plans typically insure both major medical expenses (e.g., hospitalization and surgeries) and routine medical expenses (e.g., office visits and prescriptions), subject to deductibles, co-payments and co-insurance.
Short-Term Plans for Temporary Situations
Inexpensive short-term health insurance is temporary (usually from 1 to 6 months) and should not be used as a substitute for long-term health insurance.
Short-term health insurance may be right for you if you are:
- Between jobs
- Waiting for coverage from another health plan to start
- Laid off
- On strike
- A recent college graduate
- A seasonal employee
Why Buy a Short-Term Health Plan?
Short-term health insurance has its advantages:
It is relatively inexpensive, sometimes a lot less expensive than permanent insurance.
It can usually go into effect as soon as the day following submission of the application.
Compared to a lengthy application for permanent health insurance, the short-term application is child's play. Short-term applications typically contain only a few yes/no medical history questions and take only minutes to complete.
Short-Term Plan Limitations
The scariest thing about being insured under a short-term health plan is that you could come down with a serious medical condition and then your policy terminates -- as scheduled. You could then be in a position in which you cannot qualify for private permanent coverage, and that is not a good thing.
- Gap Coverage Only
Short-term medical plans are intended as interim or "gap" coverage. They are for people who know, with some certainty, that they will be replacing the short-term coverage with long-term health insurance. such as an employer-sponsored plan,
- No Preventive Care Coverage
Short-term plans are designed to provide protection from unforeseen illness or injury; they usually do not cover routine exams, preventive care, or immunizations.
- No Coverage for Pre-Existing Conditions
Short-term plans are exempt from HIPAA legislation. So short-term health insurance companies do not guarantee renewal or waive the pre-existing condition limitation for federally eligible individuals.
Play it Safe
If you are unsure about your long-term health insurance situation, you should purchase permanent health insurance and you should do it right away.