Short-term health insurance: benefits and limitations explained
Short-term health insurance provides temporary coverage, usually from a few months to a year, and is useful for people who cannot afford comprehensive coverage. This is what short-term health insurance offers.
Understanding Short-Term Health Insurance
Short-term health insurance, also called temporary or term health insurance, is designed for people who need immediate coverage without the long-term commitment that comes with standard health insurance. Such coverage helps people between jobs, recent college graduates waiting for employer-sponsored coverage, or anyone who missed the open enrollment period for comprehensive health insurance.
Key features of short-term health insurance:
Limited coverage period: typically ranges from a few months to a year.
Lower premiums: Compared to long-term plans, short-term plans often have lower premiums.
Limited Reimbursements: Coverage for pre-existing conditions or certain types of treatments may not be possible.
Higher deductibles and co-payments: Short-term insurance policies often have higher co-payments.
Duration of coverage.
– Short-term health insurance: usually covers a period of less than 12 months and is intended for temporary coverage, for example during periods between jobs.
– Long-term: provides coverage for a year or longer, often intended for ongoing healthcare needs.
Costs:
– In the short term: lower monthly premiums, but possibly higher co-payments if medical care is required.
– Long term: Higher premiums, but broader coverage and in most cases lower deductibles.
Eligible:
– Short term: Requires basic health information and usually does not involve extensive screening.
– Long-term: Extensive medical examinations and medical histories may be required, which may affect eligibility or premiums.
Advantages:
– Short term: covers essential services, but may exclude pre-existing conditions and offers limited benefits.
– Long-term: Comprehensive benefits including preventive care, prescriptions, mental health care and maternity care.
Provider Network:
– In the short term: There may be a more limited provider network.
– Long term: usually offers a wide network of providers.
Renewal:
– Short term: Non-renewable or renewable for a limited time only.
– Long term: Renewable as long as premiums are paid on time.
Short-term insurance is typically a temporary solution, while long-term plans are more permanent and offer more comprehensive protection.
Dhirendra Mahyavanshi, Co-Founder and CEO of Turtlemint (an insurance technology company) explains when you should buy short-term health insurance.
Consider purchasing short-term health insurance in the following situations:
Gap in coverage: If you are between jobs or waiting for a new plan from your employer to take effect.
Temporary need: If you need cover for a specific event or situation, such as a trip abroad or a short-term project.
Cost-effective option: If you are on a budget and only need temporary coverage.
First publication: Sep 13, 2024 | 4:24 pm IST