When one has recently been given the pink slip, COBRA insurance usually steps in to continue coverage. However, its price tag could be very steep, and a better alternative might be temporary insurance. These days, this cost distinction becomes even more important.
You might have heard the term COBRA insurance being bandied about at your workplace. It is essentially coverage that commences after a person loses his/her employment, so that coverage is continuous. But then, you might not be aware that COBRA coverage is often more expensive, and that you may not automatically qualify for it. In this scenario, temporary insurance provides a viable alternative.
Your short term insurance plan is also called temporary insurance, and offers typical short term benefits: primarily unexpected medical illnesses. A range of benefits including physician consults, hospitalization, prescriptions, diagnostic exams, ambulance services, and emergency care are usually part of the short term health insurance plan. As short term benefits usually go, you will not be covered for previously existing conditions and pregnancy.
Short-term medical insurance can be purchased for a month, to a year, in most cases. The policy can usually be renewed quite easily; however, some plans consider each renewed policy as a new one, applying pre-existing conditions and premium clauses accordingly.
It is important to remember that short term medical insurance cannot be an adequate long-term health insurance plan. It is primarily meant as coverage for temporary periods. Long term health insurance plans offer several critical benefits not often available to the short term health insurance customer: scheduled physician visits and maternity, for instance.
When getting back on a regular long-term health plan, short-term medical insurance can often be counted toward creditable coverage for group plans. Labeling an insurance plan as creditable coverage means that the plan counts as equivalent coverage when determining pre-existing conditions and effective continuous period of coverage. Short-term medical insurance plans are usually not considered creditable coverage for individual plans.
You can easily purchase short term health insurance online. Since the plan is temporary, you are not usually subjected to lengthy underwriting procedures.
Short-term medical insurance works best for people who are looking for stop-gap insurance between jobs and if insurance is expected to be required for six months or less. It can provide a viable alternative to COBRA insurance in case of a person losing his/her job. In that uncertain situation, short-term health insurance can step up to the plate and deliver.
Dan Miller often writes about short term insurance.