Keep Calm And Short Term Health Insurance On

Divorce, job loss, losing access to a parent’s health insurance plan – life has a way of throwing curve balls once in awhile, which can leave you without health insurance. The stress of finding health coverage, especially when reduced income is a factor, can be unsettling. What many do not realize is that short term health insurance can provide coverage for unexpected medical expenses while you get back on your feet.

Short term health insurance, also known as short term medical, is a temporary solution. You can apply for just 30 days while you are waiting for new major medical coverage to begin, or depending on your state of residence, apply for up to 364 days to ensure you have a health insurance policy to protect you while you work on getting your groove back.

Here is a list of life situations that could make you an excellent candidate for short term medical:

  • Job loss, which results in loss of health insurance coverage
  • Employer drops health insurance coverage
  • In need of a COBRA alternative that is cheaper
  • Newly married or divorced and in need of temporary solution
  • College student
  • Missed the open enrollment period and can’t sign up for an Obamacare plan
  • Refuse to purchase an Obamacare plan due to beliefs, but need coverage
  • Early retirees who are not Medicare eligible
  • Adults turning 26 and losing coverage from parent’s plan

Short term health insurance is extremely affordable and flexible for lifestyles in transition. For illustrative purposes, let’s put this in an everyday scenario.

Charlie is a start-up entrepreneur that lives with his parents in Dallas, but is approaching his 26th birthday, which means he will no longer be eligible for health insurance on his parent’s plan and needs to get his own coverage. He is very healthy and doesn’t take any medications, so he plans to find a plan based on price since he doesn’t anticipate needing to see a doctor during the year. Charlie looks at both individual health insurance through the federal marketplace, and short term health insurance. Charlie does qualify for cost assistance from the federal government in the form of a tax subsidy since he only pulls in $25,000 a year as CEO of his company. Here is what he finds:

Individual Health Insurance

  • Bronze metal level
  • $5,000 deductible
  • $40 in-network office copays
  • 80/20 coinsurance
  • $180 retail price
  • $98 after cost assistance

Short Term Medical

  • Lowest tier plan
  • $5,000 deductible
  • $50 office co-pays
  • 80/20 coinsurance
  • $42 retail price
  • (No cost assistance available)

Even though Charlie qualifies for cost assistance, short term health insurance is far cheaper than individual Obamacare coverage. Charlie will save $56 each month applying for short term coverage. Should his income have been higher, disqualifying him from a tax subsidy, he would save $138 each month skipping the individual health plan.

The Fine Print

  • You cannot have a pre-existing condition.
  • You cannot get federal cost assistance to help pay for your coverage like you can with an individual Obamacare plan.
  • You can only have short term health insurance for up to three months before you have to pay a tax penalty. By law, all Americans must enroll in a qualified health insurance plan that meets the standards of the Affordable Care Act, or get fined for failing to do so. Short term medical is not a qualified health plan. In 2016 individuals who do not have an Obamacare plan will pay $695 per adult, $347.50 per child or 2.5% of their income in fines, whichever is greater.

Need to talk it through? Call 866-566-2707 to find out more about how short term health insurance can be the perfect temporary solution for your healthcare needs.