No matter how carefully you have planned for your health care costs and made sure you have adequate health insurance, you may find yourself in a position of being without insurance coverage for a short period of time. This might be because you have retired from a job and are not yet Medicare-eligible, or your Medicare eligibility is still several months away.
Whatever your reason for being temporarily without health insurance, you don’t need to be without coverage. This is why I am taking the opportunity to talk about short-term health insurance plans, which I’ve found to be a growing trend in any transitional coverage circumstance.
What Is a Short-Term Plan?
A short-term health insurance plan is one that is in effect for a pre-determined amount of time. Policies are available for a period of 30 days up to a year, and can be renewed depending on the carrier and your location.
Short-term plans are considered limited-benefits policies, only because they are not required to offer the minimum 10 Essential Benefits or the 100 percent preventive care coverage that Affordable Care Act (ACA) plans do. This limited coverage actually makes a lot of sense for senior citizens who do not need the wide array of benefits found in every ACA plan (such as maternity coverage!).
Because a short-term plan is a limited-benefit policy, the monthly premium is much less expensive than a traditional renewable insurance policy. For seniors on a limited income, a short-term health policy can provide the coverage needed at an affordable rate.
Who Benefits From Short-Term Health Insurance?
One of the main reasons you might choose a short-term health insurance policy is if you are only a few months (up to a year) from becoming eligible for Medicare. The premiums are very affordable and there are a variety of different deductible and copay options to choose from. Purchasing a short-term plan can provide necessary coverage for major medical expenses while you are waiting to apply for your Medicare benefits.
However, there are many other reasons senior citizens who are not yet Medicare-eligible might choose a short-term health plan. Some have changed jobs and are waiting for employer-sponsored health plans to take effect. Others are not offered insurance through an employer but are unable to afford a more-comprehensive health plan. Whatever the reasons, a short-term plan makes sense for many people.
Are There Drawbacks to a Short-Term Plan?
As I wrote earlier, these types of plans are limited-benefit plans, so if you are suffering from a chronic illness that requires frequent office visits and recurring medications, this type of plan may not provide all of the coverage you need. However, these plans are an excellent choice for those of you who are in reasonably good health and don’t go the doctor often.
Short-term health plans are not guaranteed-issue plans, so you can be denied coverage or charged a higher rate for pre-existing health conditions. Additionally, these plans do not prevent you from being assessed a tax penalty for being uninsured, since they do not contain the coverage required under the ACA.
The Benefits Outweigh the Drawbacks
Despite these drawbacks, many people find a short-term health plan is completely adequate for their health care needs. Additionally, senior citizens are often on a limited income and find that it is actually less expensive (by far) to purchase a short-term health plan and pay the tax penalty!
Additionally, if you only use a short-term policy for two or three months while you are waiting to enroll in a Medicare or Medicare Advantage plan, you will not be assessed the penalty. As long as you are only uninsured for three months or less, you will not be penalized.
Short-term plans are also issued very quickly, making sure you are not without health coverage for any length of time. In many cases, a short-term health policy can become effective the day after you apply.
Combine a Short-Term Plan With Money-Saving Programs
You can combine a short-term health plan with other money-saving tools to ensure that you have quality health coverage at a fraction of the cost. At MediGap Advisors, we offer a variety of short-term health plans that can fit your insurance needs if you are experiencing a lapse in coverage. You can compare rates and receive an instant quote, and in many cases coverage can begin the next day!
We also offer additional benefits like discounted lab fees and reduced-cost medical imaging services. We can even provide a discount prescription drug card so you can save money on all aspects of your health care. For more information on these money-saving offers, please visit our Additional Benefits page or contact a MediGap Advisor today!
Wiley Long is founder and president of Medigap Advisors, and is passionate about helping people navigate the confusing waters of Medicare. He is the author of The Medicare Playbook: Designing Your Successful Health Coverage Strategy, a clear and simple explanation so you can make the most of your Medicare coverage. For more information visit www.MediGapAdvisors.com.