Get the facts: Everything you need to know about Short Term Medical
Whether you're unemployed or a part of our nation of job hoppers, you’ll probably wind up with short gaps in employment. This means you’ll need to find health insurance while you’re between jobs. Finding health insurance without a job can be challenging, because money is often tight during such times. So what choices do you have when you need health insurance and have no income? The answer may surprise you. In addition to COBRA, which allows continued coverage under your existing group benefits, options may include short-term health insurance, individual major medical insurance (also known as an ACA plan or Obamacare), and Medicaid. What you choose will depend on a few factors, including your circumstances, how long you need benefits, what coverage you qualify for, your budget, and your healthcare needs. Let’s take a closer look at each of the four affordable options to see how they differ and why you might pick one over another. 1. COBRA to continue existing coverage COBRA, which stands for the Consolidated Omnibus Reconciliation Act, allows you and your family to temporarily continue group health coverage when you would otherwise lose it. You retain the same benefits and provider networks you already have when you elect COBRA. To qualify for COBRA, you must be enrolled in your employer’s health plan and experience a qualifying event that would cause you to otherwise lose that coverage. Qualifying events for covered employees include: Termination of employment for any reason other than gross misconduct.Reduction in the number of hours of employment.There are additional qualifying events for the spouse and dependent children of covered employees.This option tends to be a fit for those who want to keep the coverage they already have, regardless of cost. Some reasons you might prefer to elect COBRA include having met or paid into your plan deductible for the year, wanting to continue care through your existing in-network healthcare providers, or not wanting to switch plans because you like the one you have.You want to look into COBRA alternatives if you can’t afford the premiums or will be moving out of your plan network after becoming unemployed.Cost: Typically your full premium (including any portion your employer covered) plus a 2% administrative fee. The amount cannot exceed 102%.Enrollment: To elect COBRA, you have at least 60 days from either the date you were provided with your COBRA election notice or the date you would lose coverage, whichever is later.Coverage length: 18 or 36 months depending on the qualifying event and extending from the date it occurred. Under some circumstances, coverage may be extended if a second qualifying event occurs.COBRA coverage may be terminated early if your premiums aren’t paid in a timely manner, your employer discontinues the group health plan, or you begin new coverage through another group health plan, to name a few reasons.2. Short term health insurance for temporary benefitsIf you're unemployed but COBRA is too expensive, you may want to consider short-term health insurance. These plans are designed for temporary situations, and the benefits they include reflect that purpose. But it's important to note that a short-term medical plan wouldn't cover the same scope of benefits as COBRA would.Short-term medical insurance is not a major medical plan. Instead, it helps pay for covered medical expenses related to injuries and sudden illnesses. Most short-term coverage includes benefits for doctor office visits, hospitalization, and emergency care. Plans vary, of course, and some have benefits for a few basic preventive screenings or extra non-insurance benefits for dental and vision care.Short-term plans don’t include all of the 10 essential health benefits (e.g., maternity) and preventive services required by the Affordable Care Act (ACA), and aren’t likely to cover pre-existing conditions. As such, premiums tend to be lower than COBRA and individual major medical premiums—you aren’t getting the same level of coverage.Short-term health insurance tends to be a better fit for those in relatively good health. Why? Again, your policy won’t likely cover pre-existing conditions. Plus, not everyone qualifies for a short-term policy. Unlike group and individual major medical insurance, short-term medical insurance is not guaranteed issue. When you apply for coverage, you’ll need to answer a few health-related questions to determine your eligibility, and your application could be denied based on your health history.Cost: Prices vary depending on your age, gender, and location, and monthly premiums reflect that pre-existing and other conditions (maternity, mental health) are not covered.Enrollment: You can enroll year-round. Even better: It takes minutes to learn whether or not your application has been approved. If approved, you can begin coverage as soon as the next day.Coverage length: 30 to 364 days, depending on your state. You choose your policy length when you apply and, if your application is approved, enroll in short-term coverage. If your policy ends and you need more coverage, you may be able to apply for a new policy—the ability to apply for subsequent policies also varies by state.3. Healthcare Marketplace, also known as Obamacare for long-term gaps between jobsIf COBRA costs are expensive and short term health insurance coverage isn't as comprehensive, you may want to look into health insurance on the ACA healthcare marketplace. These plans are colloquially known as Obamacare plans. They will likely cost you less than COBRA, especially if you qualify for a subsidy, and they will more closely resemble your job-based coverage than a short-term plan does.Major medical insurance fulfills ACA requirements for minimum essential coverage, meaning it includes all of the 10 essential health benefits as well as specified no-cost preventive services. That’s why unsubsidized premiums will, for the most part, be higher than short-term plan premiums—with an ACA plan, you are gaining access to more comprehensive benefits.However, if you qualify for subsidies, an ACA plan will likely cost you less than COBRA and short-term coverage. In that case, you should probably choose an ACA plan to obtain the most coverage for your dollar.This option tends to be a better fit for those who:Don’t know how long they’ll be unemployed.Have healthcare concerns that require ongoing care or prescription medications.Want a full range of benefits from preventive to emergency care.Find COBRA premiums too expensive.Won’t qualify for Medicaid.Major medical insurance is guaranteed issue. You can’t be denied coverage based on your health history. For the most part, anyone who lives in the United States, is a U.S. citizen or legal resident, is not incarcerated, and is not enrolled in Medicare will automatically qualify.Cost: ACA premiums vary based on five factors—your age, location, tobacco use, individual or family enrollment, and plan category selected.Subsidies can also have an impact on the cost of coverage and care. Premium tax credits help reduce what you pay for coverage each month, and cost-sharing reductions for silver plans will help lower your out-of-pocket cost-sharing responsibility (i.e., deductible, coinsurance, copay amounts). Subsidies are based on income. You also have to buy coverage through a state or federal exchange to qualify.Enrollment: Annual open enrollment typically runs from November 1 through December 15 (though it may vary for some state-based exchanges). Outside of this time, you must experience a qualifying life event for a special enrollment period; qualifying life events include losing job-based benefits, moving, and changes to your family.Coverage length: The entire calendar year, as long as you continue to pay your premiums. During open enrollment, you can renew your plan (your deductible will reset on January 1).4. Medicaid coverage for when you have no incomeIf you are unemployed and have no source of income, it’s possible you’ll qualify for Medicaid plan that provides health coverage to millions of Americans.Medicaid programs vary by state—each state designs and runs its own program based on federal guidelines. However, Medicaid in every state fulfills the ACA’s minimum essential coverage requirements. Each state program includes benefits mandatory under federal law (e.g., hospital services, laboratory and X-ray services, physician services) and possibly optional benefits such as prescription drug coverage and physical therapy.Anyone whose household income is below 138% of the federal poverty level in states that expanded Medicaid under the Affordable Care Act will qualify. If you live in a state that didn’t expand its Medicaid program, you’ll need to meet other eligibility criteria set by your state. Populations often covered by Medicaid include low-income adults, children, pregnant women, elderly adults, and people with disabilities.Cost: Anywhere from nothing to a few dollars per month, depending on your state.Enrollment:Year-round. Your coverage may begin on the date of application or the first of the month after your application is approved. If you were eligible before you applied, you may also be covered retroactively up to three months prior to your month of application.Coverage length: Month to month as long as you qualify. You may be asked to verify your eligibility.What’s the best health insurance if you’re unemployed?In addition to COBRA and the alternatives listed above, you may have other ways to obtain coverage while you’re between jobs. For example, you might have access to health insurance through your spouse’s job-based plan or even a parent’s plan if you are under age 26.There isn’t one single option that’s considered right for everyone. Your decision ultimately comes down to cost and covered medical expenses. Ask yourself, "What can I afford?" or "What level of benefits do I need and feel comfortable with?You may want to start by looking into each option more closely. Find out what COBRA will cost you. Gather quotes for a few short-term and major medical plans. See if you might qualify for an ACA subsidy or Medicaid.If you have questions or need help understanding your options along the way, there are many resources available. You can contact your employer’s human resources department, a customer service representative at your insurance carrier, or call 800-620-4519 to reach one of oura licensed health insurance agent.
At some point in life, you might wind up uninsured. You may know it’s coming and have time to plan for it, or you may not. Either way, you’ll be on the hook to pay for healthcare. That’s where short-term medical insurance comes in. Also known as short-term health insurance or temporary health insurance, this type of plan provides quick, temporary insurance coverage when you’re in between major medical policies. But is a short-term health insurance plan the right choice for you? Let’s look at answers to some common questions, including how temporary health insurance works, what it covers, when it makes sense, and why it differs from major medical insurance. Once you understand the basics, you’ll be better equipped to make an informed decision. What is short-term health insurance? Short-term medical is temporary health insurance. It’s designed to be cost-effective and flexible during times of transition, allowing you to: Get covered as soon as possible. Apply online and enroll within a few minutes. Coverage is available year-round and may begin as early as the next day, if you’re eligible.Choose your policy length. Policies last from 30 days and to 364 days, depending on where you live and how long you need coverage.Access benefits right away. Coverage is typically limited to unexpected medical expenses rather than long-term healthcare needs (i.e., preventive care, maternity).The Affordable Care Act doesn’t apply to short-term health insurance, which means it isn’t guaranteed issue and does not include all of the essential health benefits that major medical insurance (aka ACA plans) must include.While short-term health insurance does not provide major medical coverage, it does have some similarities:You pay a premium in exchange for coverage.You present your plan ID and pay a copay, if required, when visiting a healthcare provider.Your provider files a claim with your short-term health insurance carrier, which pays for covered medical expenses according to your policy.You receive a bill for your portion.Like ACA plans, short-term plans typically include a deductible, coinsurance and copayment. They may or may not include a provider network.What does short-term health insurance cover?Short-term health insurance generally covers high-dollar medical expenses related to injuries and unexpected illnesses. For example, plan benefits typically include things like hospital room and board, emergency care, and surgical services as opposed to preventive care, maternity, and treatment of pre-existing conditions.Of course, not all short-term coverage is the same. Some may include benefits for a few basic preventive care services (e.g., Pap smears) or limited coverage for pre-existing conditions.Bottom line: You’ll want to shop around to see what short-term plan best suits your needs.How much does short-term medical insurance cost?The amount you'll pay for short-term health insurance coverage depends on the plan you select. Short-term plans come with less benefits than a comprehensive major medical plan, so they could cost less.As with any type of health insurance, you can generally expect to pay a lower premium for a plan with a higher deductible and limited benefits and vice versa. Adding a spouse and dependents will also increase your cost.Short-term plans are not eligible for premium tax credits or cost-sharing reductions. If you qualify for these ACA subsidies, then you’ll probably want to enroll in an ACA plan through a state or federal exchange. You can use an online subsidy calculator to see if you might qualify.Short-term health insurance vs. Major medical insuranceShort-term health insurance and major medical insurance are different products designed to serve different needs. It’s not a true apples to apples comparison. At a high level, here’s what to know about each product:Short-term medical insurance plans:Provide temporary coverage with a focus on unexpected healthcare.May be purchased year-round. There are no open or special enrollment periods.Does not include all of the essential health benefits.Is not eligible for ACA subsidies (i.e., premium tax credits and cost-sharing reductions)Is not guaranteed issue. You can be denied coverage based on your health history.Is not available in every state.Major medical insurance:Provides long-term coverage with a focus on healthcare across the spectrum (e.g., preventive, pre-existing conditions, unexpected).May be purchased during the annual open enrollment period or a special enrollment period, if you qualify.Includes all of the 10 essential health benefits.Is eligible for income-based ACA subsidies if you buy from a government exchange and qualify.Is guaranteed issue. You cannot be denied or charged more based on your health history.Is available in every state.The decision ultimately depends on how long you need coverage, your typical healthcare needs and your financial situation.Is short-term health insurance right for you?Short-term health insurance coverage isn’t available to everyone. Applicants can be denied based on health history, and plans aren’t sold in every state. These types of plans also may not be a fit if you qualify for an ACA subsidy, have pre-existing conditions, want all of the essential health benefits (e.g., preventive care, maternity), or expect to need long-term coverage.Generally speaking, temporary health insurance tends to be a fit for healthy people who are:Between jobs with employer-based benefits.Attending college outside a parent’s health insurance plan network.Early retirement before Medicare takes effect.Aging off a parent’s health plan and not yet being enrolled in other coverage.Looking for an alternative to COBRA, if it's too expensive.In an employer waiting period before group benefits take effect.Ineligible for an ACA subsidy or Medicaid but unable to afford major medical insurance at this time.How to buy a short-term health insurance planShort-term health insurance isn’t sold through the state and federal ACA exchanges, but it’s easy to find online. [Hint, hint: You’ve come to the right place.]The application and enrollment process is fairly straightforward:Get plan quotes. Start here to find and compare plans. Enter some basic information, including your date of birth and ZIP code, to see what plans are available to you and how much they cost.Compare your options. As you narrow your options, you’ll want to consider the following:Cost— Look at premium, deductible, coinsurance, and copayment amounts. What is most affordable for you?Benefits — What medical expenses does the plan cover? Does this amount of coverage align with your healthcare needs?Availability — What is the maximum policy length in your state and you apply for another policy once your first policy expires? Will these limits keep you covered long enough?Decide and apply. Be ready to answer a few basic health-related questions. You’ll have an answer within minutes - and you can begin coverage as soon as the following day, if your application is approved.If you don’t qualify for a short-term plan, you may want to look into other options such as an ACA plan or Medicaid.Still not sure what kind of health insurance is right for you? Call one of our licensed agents to talk through your options: (855) 651-5094.
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