An Overview of Short Term Health Insurance
With all the big tadoo about health insurance, Obama and the Affordable Care Act, people have been scrambling about trying to obtain health insurance. However, there are still many questions and concerns, particularly regarding the use of short term health insurance as an alternative to obtaining insurance through the marketplace. Read below and learn a little about short term health insurance and when it is and isn’t the right choice.
What is Short Term Health Insurance?
Short term health insurance is just what its name implies. It provides you with health insurance for a short term or limited amount of time. While some policies may provide coverage up to a year, they’re typically only valid for one to six months. Applying for short term health insurance is usually a simpler process than applying for a traditional long-term health insurance policy.
Short term health insurance is offered by many companies that are part of the IHC group, an organization of insurance carriers. Applicants can choose from various insurance companies, such as Humana, United Healthcare Services and possibly Blue Cross and Blue Shield, to name just a few. The premium for short term health insurance, usually cheaper than traditional long term health insurance, is based on the deductible, co-payment and maximum coverage the applicant chooses.
When is Short Term Health Insurance a Good Choice?
While short term health insurance does not provide the same vast coverage found with long term health insurance, it does have some advantages and is ideal for the following individuals.
- Individuals who are between jobs and don’t wish to be without some sort of health insurance
- College graduates who want temporary health insurance until they find full-time jobs that offer health insurance
- Newly hired individuals who are not yet qualified for the company’s health insurance
- Early retirees or those on military discharge
- Employees who are on strike and not eligible for the company’s insurance
- Individuals who have lost coverage and cannot afford COBRA
What Does Short Term Health Insurance Offer?
Short term heath insurance may cover emergency care, diagnostic testing, hospital care, surgery and prescription drugs. Short term health insurance does not generally cover annual checkups, preventative care, vision or dental visits, childbirth or pregnancies. Its main purpose is to provide health insurance coverage or accidents or illnesses, but for short amount of time.
One of the main disadvantages of short term health insurance is that it is exempt from HIPAA, which means that it generally does not cover preexisting conditions. Another disadvantage of short term health insurance is that it does not cover individuals who are over 65 or may not cover individuals who have previously been denied health insurance.
Does Short Term Health Insurance Meet the Legal Insurance Act Requirements?
Although short term health insurance has been around for many years, it’s become more popular recently with people trying to find suitable insurance or coverage through the federal and state exchanges. Many insurance carriers are trying to sell short term heath insurance as alternatives to policies found on the marketplace as part of the Obama Affordable Care Act. But, does short term health insurance meet the legal insurance requirements?
Some say yes, while others say no. Short term health insurance may provide some sort of health insurance, but it covers only the bare minimum. One of the main requirements of the Affordable Care Act is that a health insurance policy must provide essential coverage, which short term health insurance policies do not. Under the Affordable Care Act, insurance companies cannot deny someone coverage because of preexisting conditions; however, short term health insurance does not cover preexisting conditions. Short term health insurance is not required to be renewed, unlike coverage under the Affordable Care Act.
In summary, individuals who have short term health insurance may meet the requirement of having some sort of health insurance, but they will still be subject to tax fines and penalties because they’re not receiving the type or amount of health insurance coverage required. It’s important for individuals to realize that while short term health insurance may be better than no insurance, it may still be inadequate from a taxation standpoint.