- Short term health insurance is usually at a lower cost than an individual major medical plan
- Short term health insurance plans generally include more options than you will find with major medical plans on or off the marketplace.
- Short term health insurance usually does not have the doctor and hospital network restrictions that are part of most typical standard medical insurance.
- Short term health insurance plans may include additional features and services that you do not have access to now.
Why Is Affordable Health Insurance so Important for the Unemployed?
According to a study published in 2012 by Browning and Heinesen in the Journal of Health Economics:- Job loss has been found to increase health risks for people, including circulatory disease, suicide and suicide attempts, and death and hospitalization due to traffic accidents, alcohol-related disease, and mental illness.
- More than 40 percent of unemployed persons are unemployed for 15 weeks or more.
- 1 in 4 of the unemployed are unemployed for 27 weeks or more.
Why Is It Risky to Go Without Affordable Health Insurance?
Do you have enough savings to cover your living expenses AND any medical expenses you may need for 4 months, 6 months, 9 months, a year or longer while you remain unemployed? Most people do not. A recent study widely reported in January 2016, including in Fortune magazine, by Bankrate.com from a study done by Princeton Survey Research Associates International in December 2015 showed that:- 63% of Americans do not have enough money in savings to cover an unexpected $1,000 medical event.
What Is Short-term Health Insurance?
Short-term health insurance, also known as temporary health insurance, is health insurance that is available anywhere from one month to 364 days, depending on your state of residence.- Short term medical insurance covers doctor visits, hospitalizations, emergency care, lab tests, prescription drug costs and more.
- Most short term medical insurance policies are “network-free.” This means you can choose any doctor or hospital. That’s important because when you need medical care, you really want to be able to choose where you go for that care.
- Short term medical operates similarly to permanent health insurance, which means monthly premiums, deductibles, coinsurance, copays and out-of-pocket maximums apply.
- Short term health insurance does require consumers to answer medical questions in the application, as some pre-existing conditions disqualify an individual from applying.
- Short term health insurance plans typically cost one-half the price of individual health insurance plans.
- If you are healthy, then this will not matter to you, and you can rely on this insurance in a true insurance fashion: to protect you against unforeseen sickness and injury.
- If you do have a pre-existing condition, you should talk with a licensed professional insurance agent about your options, which may include the public Healthcare Marketplace (Exchange).
What About Those Obamacare Tax Credits? Don’t They Guarantee Affordable Health Insurance?
Some people think that Obamacare and those tax credits are the answer for the unemployed. That may be true only if you expect that you will remain unemployed for a long time. Many people believe that their unemployment period will be less than a year. So what happens if you do go the Obamacare health insurance exchange route to get tax credits? First, you have to apply online, indicate what you expect your income to be, so you can be determined to be eligible for tax credits. Then you select a plan, and the plans you have to choose from are limited and may be more restrictive than you are accustomed to in terms of doctors and hospitals you can use. Let’s say you qualify for tax credits because you estimate your income for the coming year to be quite low. After all, you do not have a job now, and you do not really know when you will get a job and regain your income stream. So that is all well and good. However, if it turns out you were credited too much throughout the year, any over-payments will be reconciled when you file your tax return. This means you may need to pay back some or all of the tax credit if your income turns out to be higher because you get a job during the year. Finding a job would be great news, but also it may increase your marginal tax rate a bit as you begin to earn income and, thus, phase out your premium tax credit.What About COBRA? Why Is COBRA so Expensive?
If you had a job with employer-sponsored health insurance, then they most likely offered COBRA coverage when your job ended. COBRA stands for Consolidated Omnibus Budget Reconciliation Act. It requires that group health plans provide temporary continuation of coverage that otherwise may be terminated. Continuation of coverage is the good news. The bad news is the cost. Instead of the employer paying for a good part of the health insurance premium cost, in most cases, former employees that take COBRA coverage pay the full cost of the insurance. In fact, they can even be billed 2% over the full cost to account for administrative expenses for the COBRA coverage. If you take the COBRA coverage offered and then decide that it is too expensive for you to continue, you can drop the coverage, but in that case, you cannot apply for Obamacare exchange coverage (and most other standard health insurance plans) until the next annual open enrollment period. This period has been starting on November 1 for coverage that begins the following January 1.Short Term Health Insurance Can Solve Your Temporary Need
For all of these reasons, short term health insurance can be the solution you need now. Why wait and risk and worry? There also are some additional advantages to this type of insurance:- The cost may typically be one-half the price of individual health insurance plans.
- Unlike enrolling in an individual medical policy, the short term application process is simple, many times providing next-day coverage in a matter of minutes. It’s easy to select a policy, easy to apply, and you will know right away when your coverage starts. Actual coverage can usually begin as soon as the next day.
- You choose the length of time you want for your coverage.
- Some of these plans also include additional benefits and features that you did not previously have. Some of these features can help you save time and money on various types of health care.
- Risk your physical health by not getting medical care that you need
- Risk your financial health by getting care and paying a lot out of pocket