When Should I Use Short Term Health Insurance?
By Miriam Caldwell. Money in Your 20s Expert
Miriam Caldwell is a freelance writer with a specialty in personal finance. She believes that you can lay a solid foundation by starting to manage your finances in your twenties.
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Short term health insurance can provide a low cost short term option to help you fill in the gaps you have in coverage.
Short term health insurance can be very inexpensive. Rates can be as low as $30.00 a month. However the plans all operate with a high deductible that must be met before insurance begins to pay medical costs. Some plans provide full coverage once you have met the deductible other have additional coinsurance. If you are pregnant most short term health insurance will not cover you, and if your spouse is pregnant they may not cover you on an individual policy as well.
Generally short term health insurance does not cover well medical visits or other routine care that would fall under an annual doctor's visit. If you are pregnant, you may qualify to apply for health insurance under the health exchanges set up by your state for the Affordable Care Ac t. You can also qualify if you have a had a life changing event or lost your coverage. Be sure to check out this option in addition to short term health insurance plans.
Short term health insurance policies have a time limit in how long they will provide coverage you can receive coverage for one month and some policies will extend it up to three months.
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These policies are designed to protect you and your assets during the short lapses that you may have in your regular insurance coverage. An insurance agent can explain the differences in coverage and what you will be responsible to pay for. This is more of stop gap insurance policy. It is there to cover the emergencies that may happen while you are waiting for your new health insurance policy. Short term health insurance does not meet the insurance requirements for the Affordable Care Act. This means that you may be penalized for the months that you use a short term health insurance policy. However, it can still protect you financially if you do have a major medical emergency. If you know that your gap i only a month, then you may end up saving money by using a short term policy even considering the prorated fine that you will have to pay. Be sure you consider all of the options available to you and see if can qualify for other insurance either o your parents plan or through the Affordable Care Act.
You may consider using the policies if you do not want to have a preexisting condition or waiting clause on your next health insurance. Since the policies are so inexpensive it may be worth the little bit of money to get short term health insurance. Additionally many alumni organizations can provide you with a contact and possible discounts on the policies when you first graduate. This cover you while you look for a job and wait until your health insurance policy begins at your new employer.Source: moneyfor20s.about.com