As a resident of North Carolina, can you buy short-term health insurance from a number of companies. So how do you find a policy that’s right for you? Let’s start with the basics.
Short-term medical insurance is temporary coverage meant to give you healthcare coverage while you wait for permanent individual health insurance. Plans can last for a minimum of 30 days and up to 364 days. North Carolina law also allows you to reapply for up to 36 months. This is good news if you’re not sure when you’ll have access to employer health insurance coverage or you just need an economical solution to ensure coverage right now.
What You Need to Know
Short-term health insurance can be a good alternative to permanent coverage if you’re pretty healthy and don’t have any preexisting conditions that require ongoing medical treatment.
Your monthly premium can vary a lot, depending on the benefits you choose.
If you do have health issues, many North Carolina residents qualify for help in paying for permanent insurance through the Affordable Care Act federal Marketplace.
It takes about five minutes to enroll online once you’ve figured out what deductible, coinsurance and copayment options you want for your temporary plan.
How Do I Know Short-Term Health Insurance Is Right For Me?
Here are some things to know about short-term insurance to help you make your decision:
It’s affordable.
Short-term medical plan premiums are lower than other types of coverage, especially if you don’t qualify for a financial subsidy. Temporary plans, though, aren’t required to cover all the “essential health benefits” that Affordable Care Act (ACA) plans must include. This is an important reason why short-term plans are a lot less expensive than ACA plans.
You can sign up very quickly.
When you enroll online in a short-term insurance plan, you can select your coverage start date, or start coverage the very next day. In less than 24 hours, you can have peace of mind knowing that you’re covered if an unexpected accident or illness occurs.
They’re a good choice if you’re relatively healthy.
Temporary coverage typically doesn’t cover people with preexisting conditions, so if you have one you might not qualify. But if you’re in good health and don’t anticipate needing much or any medical treatment while you’re covered, short-term insurance can make sense.
Short-term health insurance may be your best options in certain situations.
You might consider a short-term plan if you’re uninsured and waiting for the ACA Open Enrollment Period to begin, or if you don’t qualify for a Special Enrollment Period.
Other instances when a short-term medical plan could make sense include:
- You’re waiting for coverage from a new employer to start.
- You’re turning 26 and will no longer be covered by your parent’s health insurance.
- You’re getting divorced, losing access to previous coverage.
- You’re retiring early and will lose health insurance through your job.
- You’ve lost or left your job and can’t afford COBRA coverage.
Whether you lose health insurance coverage suddenly or are planning ahead for the time when you’ll be uninsured, short-term health insurance can bridge that gap while you determine your next steps.
When Would Short-Term Insurance Not Be Right For Me?
If you have a preexisting condition or have experienced severe illness in the past, you won’t qualify for temporary coverage. For example, if you have had cancer or a heart attack or stroke, your application would be denied based on your health history.
Similarly, if you’ve seen a doctor and she recommended diagnostic testing—even if you haven’t been diagnosed with an illness—this can also disqualify you. The claims administrator at any insurance company you choose has the right to review years of past health history before deciding whether to pay a medical bill, too.
In general, as mentioned above, you need to be healthy to qualify for coverage—or risk not having claims paid due to a preexisting condition.
Short-term health plan coverage also doesn’t make sense if your income qualifies you for a financial subsidy for an ACA (aka Obamacare) plan you can buy through the federal Marketplace. If you fall between 138% and 400% of the federal poverty guidelines, you’re eligible for assistance that will lower the cost of your monthly insurance premium. Forty percent of North Carolina residents qualify based on income for subsidies, or even for their entire premium to be covered for a bronze Marketplace plan.1
An Obamacare plan can be a much better financial choice, even with the higher premiums, if you have a health condition that requires ongoing medical care and/or costly prescriptions.
How Much Do Short-Term Plans Typically Cost in North Carolina?
As an example, a 35-year-old woman living in Charlotte, N.C. would pay a monthly premium between $82 and $387, depending on the benefits she selected.2
But premiums aren’t the only consideration when comparing short-term medical plans. Deductibles, coinsurance, copayments and total coverage are also costs you’ll need to weigh up as you make your decision.
Premium: This is the monthly cost of your health insurance plan. You’ll pay your first premium at the time of enrollment, even if your coverage doesn’t begin for days or weeks. Your subsequent premiums will be withdrawn from your checking account or charged to your credit card close to the time of the month you first applied.
Deductible: The total amount you must pay upfront before your insurer starts contributing is called a deductible. The amount can range from $1,000 to $10,000 during your coverage period.3 Keep in mind that the higher the deductible you choose, the lower your monthly premium will be, and vice versa. So it’s important to consider whether you’d prefer to pay less each month, knowing you would need to pay more if a medical issue arises, or if you’re more comfortable paying a higher premium and knowing your deductible is less.
Coinsurance: This is the percentage of medical bills that you’re responsible for paying after you’ve met your deductible; the balance is paid by your insurance company. In the state of North Carolina, once you’ve met your deductible you have to pay either 20% or 30% of your bills, depending on the coinsurance percentage you select.
Copayment: If you choose a short-term health plan with a copayment (copay) option, you’ll pay a flat fee for specific services, such as a visit to the doctor or an urgent care center, or for prescription drugs. It’s worth remembering that a copay refers to one service, not multiple services like lab work that can also be done at the same time as your appointment.
Out-of-Pocket Maximum: This is the most you’d be responsible for paying while you’re covered under a given policy. Once you reach that amount, your insurance company pays 100% of eligible (covered) expenses. Keep in mind that the total amount could be a combination of your deductible and coinsurance or coinsurance alone. So be sure to review your policy carefully to understand how much you’d be responsible for.
Total Coverage: In North Carolina, you can select from $100,000 up to $1 million in total coverage during your policy period. This is the total amount the insurance company is contracted to pay out in claims for as long as your coverage lasts.
How Can I Buy a Temporary Health Coverage in North Carolina?
Now that you’re familiar with some insurance terms, you’re ready to apply that knowledge to compare plans and find the one that’s right for you:
- Determine how long you’ll need coverage for. (Don’t worry; you can cancel anytime and you can also reapply if your policy runs out, for a maximum of 36 months in North Carolina.)
- Consider your budget: How much can you afford in monthly premiums? How much can you pay out-of-pocket towards the deductible, if you do have medical bills? Decide whether having a copayment for doctor’s office visits is important to you.
- Choose your coinsurance percentage (in North Carolina, your options are 20% or 30%).
- Get a free quote from a website that offers multiple plans, or speak with an insurance agent to get a quote and compare your options.
- Read and closely review any policy you’re considering. Make sure to read any exclusions, in particular, and, if you want to keep your current healthcare providers, make sure they are within the network or if you’re happy with an open network.
- Complete the application and, if you’re accepted, provide payment.
Short-term health companies offer a variety of benefit options, so it’s good to compare the differences before settling on a plan.
You can sign up online via private marketplace like Pivot Health or seek out the help of a licensed agent.
Next Steps
If you’re in good health and need temporary coverage, short-term health insurance is worth looking into. It’s an economical solution to cover a gap in insurance until you have more permanent coverage. Just remember these key steps:
- Figure out what you can afford every month.
- Decide which benefits are most important to you, given your health and any medical conditions.
- Take time to compare insurance companies and policies.
- Determine if you want an open network or a PPO plan.
- Read all exclusions and limitations in any policy you’re considering to eliminate surprises later.
It may take a little time and effort to figure out how to choose a plan, but once you do, you can breeze through the application process to get covered right away.
