Short Term Medical Insurance Answers

What is short term medical insurance?

Short term medical insurance provides high-limit medical expense coverage, on an indemnity basis, for a relatively short period of time. At the time of purchase, the insured can choose a period of coverage that may be as short as 30 days, up to as long as 180 or 185 days (i.e., approximately 6 months). Several deductible and coinsurance options exist, with the premium cost varying according to the specific deductible and coinsurance provisions selected. Limits of coverage as high as $1 million - 2 million are typically available in the marketplace.

What types of situations give rise to a need for short term medical insurance?

Several commonly occurring situations create a possible need for short term medical insurance. Individuals who are between jobs and are temporarily without employer-provided health insurance, individuals laid-off from their jobs, and individuals gaining new employment who must satisfy a waiting period before the employer's health coverage starts are likely candidates for short term medical insurance. Graduating students and college students who temporarily lose coverage under their parents' insurance because of a reduction in credit hours (i.e., reclassified from a full-time student to a part-time student) may also need short term medical insurance. Since this coverage can usually be purchased for any prescribed number of days from a minimum of 30 days to a maximum of 180 or 185 days, a coverage period can be chosen that matches exactly the anticipated need.

How broad is the benefit coverage under short term medical insurance?

Generally speaking, short term medical insurance plans provide coverage for a broad range of medical services. Although the definition of covered expenses under short term medical insurance may differ somewhat from one insurer to another, "covered expenses" commonly include room and board and routine nursing services while confined in a hospital, services provided in a hospital's outpatient department or in a free-standing surgical facility, physician and surgeon services, X-ray and laboratory services, prescription drugs, home health care, treatment provided in a skilled nursing facility following a hospital confinement, and many other types of expenses that are normally covered under a major medical expense insurance policy. Short term medical insurance excludes many of the same types of medical services as are excluded under major medical plans. It is recommended that prior to purchase, individuals carefully read the "exclusions section" and the other sections of a short term medical insurance policy. Careful attention should also be given to any policy provisions that extend coverage beyond the scheduled expiration date for injuries or illnesses for which medical treatment began prior to the expiration date.

What are some of the drawbacks, or limitations, of short term medical insurance?

First, depending on the specific circumstances, the actual need for coverage may extend beyond the period of coverage originally purchased. Under short term medical insurance, the insured does not have an automatic right to renew the coverage at the expiration of the original contract. Further, the insured's health status may have changed such that he or she will not qualify for a new insurance policy or an additional benefit period under the original policy. In this situation the individual may be left without health insurance protection. Second, the coverage is typically not continuous between the expiration of the original contract and any subsequent renewal coverage under a second benefit period. A new application for coverage must be completed, with subsequent approval by the insurer before the renewal coverage becomes effective. Any medical conditions that may have developed during the original benefit period will be treated as preexisting -- and thus not covered -- for purposes of any additional benefit period. Third, other than when the contract is canceled within the first 10 days, premium refunds generally are not available even in those instances where the need for insurance ceases before the scheduled expiration of the coverage period.