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Short-Term Health Insurance - What are the Benefits?

Aug 17, 2007
So you've just graduated from college, don't yet have a job and have just found out that you're no longer covered under your parents' health insurance plan. Maybe you've decided to leave your current job and look for a new one. Or perhaps you've found that perfect new job, but your new employer's group health insurance plan is making you wait for three months before you're eligible to use it. These are all certainly sound reasons to look into short-term individual health insurance in the state of Texas.

Short-term is as the name implies - health insurance that usually provides coverage from 30 to 180 days. There are some plans that will cover you initially for up to a year. And if your short-term need runs longer than the coverage, you may be able to renew the plan, but don't count anything longer than 12 months.

Most short-term plans offer coverage in the event of an accident or a sudden illness. And like most health insurance plans, short-term plans may have benefit limits, which means you may be required to cover an initial deductible and make co-payments. With a short-term plan you'll probably be allowed to choose your own doctors, hospitals, or other healthcare providers. You'll get coverage for inpatient and outpatient services, hospital room - including intensive care unit - and board charges, lab examinations, and X rays.

These plans don't usually require a physical exam, and your coverage begins as soon as the insurer receives your application and first premium payment. Applications can be mailed in or submitted online, and you can make payments using a check or credit card. Check with your provider for complete information on coverage and the application process.

Short-term health insurance plans also have a dark side. To keep the premiums down, these insurance plans don't offer all of the benefits of permanent plans. Most short-term plans won't cover treatment of pre-existing conditions, which is an illness or injury that has produced signs or symptoms, or for which you've received treatment for as long as the past five years. And short-term health insurance plans don't cover routine medical exams, preventive care, dental or optical care, or pregnancy and childbirth expenses.

Short-term health insurance policies are exempt from the Health Insurance Portability and Accountability Act of 1996. That means that insurance carriers issuing these policies don't have to guarantee policy renewability, and most don't. You can think of short-term policies as "get better fast" plans, since coverage will only last a maximum of twelve months and renewals even within the twelve-month period are not guaranteed. Suppose, for instance, you buy an initial term of three months.

If you get injured or sick, the insurance company will not renew for additional terms. You may have substantial ongoing costs associated with the injury or sickness, but no coverage. Insurers who carry short-term plans also don't have to waive any pre-existing condition limitations for individuals who are otherwise eligible for those waivers.

If you're thinking about purchasing a short-term individual health insurance plan, you should consider the fact that your next employer may not offer a group plan and you may not remain in your next job for very long either. That's why many people are choosing to purchase an individual health insurance plan that is portable from job to job and will cover periods of unemployment.

In many cases, people with an individual health insurance plan will also find that they are better off keeping their current individual plan and opting out of their employer's group insurance plan, choosing to take an increased pay incentive instead.
About the Author
Pat Carpenter writes for Precedent Insurance Company. Precedent puts a new spin on health insurance. Learn more at Precedent.com
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