This article is an original article from January 5, 2009. It was written by Nick Perry.
When you buy a health insurance policy for yourself or your family, you’re buying protection that will last for the full duration of your policy. Usually, that means that you’re signing a contract that agrees to one year of health insurance coverage (that coverage will automatically renew every year unless you tell your agent you want it to do otherwise). But sometimes, you don’t need a full year of coverage. Perhaps you’ve just graduated from college and you just need health insurance for a couple of months until you get a job with benefits. Maybe you’ve run into the same problem more and more of us are facing in this economic downturn: employee volume reductions have left you temporarily jobless, and all of a sudden you – not to mention your spouse and children – are without the health insurance benefits you had been counting on from your employer. You’re out there looking for a new job with new benefits, but what can you do in the meantime? In a bottomed-out economy when you’re already without your normal income, the last thing you need is for an unexpected health care emergency to wipe out your savings.
In a situation like this, I highly recommend short-term medical insurance. These policies can be absolute lifesavers for people who find themselves unexpectedly and temporarily without health insurance.
For often shockingly low prices, you can get the same benefits of a full plan for a limited period of time. Short-term medical insurance is just as simple as that. Standard, full benefits, full coverage, low price, limited duration. Does it get any easier than that?
Short term medical insurance is designed to cover a gap in coverage, and by filling that gap it provides you with a hidden benefit that’s often overlooked. If you have employer benefits, lose your job and lose those benefits, but wait for three or four months to buy an individual health insurance policy, then you’ve had what insurance companies call a “lapse in coverage.” This opens you back up to the dreaded “pre-existing condition” rules that insurers use to deny claims every day. But, if you fill that gap with a short-term medical plan, you can prove that you’ve had continuous coverage back to when your first job’s benefits began. That means that, by law, those conditions that might otherwise be called pre-existing cannot be excluded from coverage when your new benefits begin. Let’s use an example.
Say that you started a job at company A. While working there, and while covered by company A’s group health plan, you developed tendinitis in your wrist. Since that condition didn’t develop until after you were covered, company A’s group health insurer can’t deny any claims under a pre-existing clause. Unfortunately, company A has to lay you off and you realize that COBRA is just too expensive (and we have an article on COBRA elsewhere on this website for your reading pleasure!), so you suddenly find yourself without health insurance. Three months pass, and you either take a job with company B or decide to buy an individual family plan. Well, since you’ve had a gap in coverage longer than sixty-three days, any claims you make for that tendinitis may be denied as a pre-existing condition – if that new insurance policy didn’t just include a rider to exclude that condition from coverage from the beginning!
However, if you had filled that gap with short-term medical insurance, you would have had continuous coverage for the duration of your condition. That means that that tendinitis cannot be considered a pre-existing condition any longer – since you’ve been insured for it with no gap in coverage, it can’t be said that it existed before you had insurance! But when you have that lapse in coverage between your two group policies, you open yourself up to all sorts of exclusions and underwriting requirements that are easily avoidable. Add that on to the problems of going without health insurance in the first place, especially during a period in your life when you’re between jobs or fresh out of college, and you can see why going without short-term medical insurance just isn’t a wise decision to make.
Filling the gap between employer benefits or between graduation and employment is absolutely vital, and short-term medical insurance is the best, simplest, most effective way to do that. If you have any questions about short-term medical insurance, please feel free to use the information on this website to contact me directly. I’m always happy to help!