Temporary
health insurance on the rise | | |
|
Many forms of protection
Premiums of short-term coverage are likely cheaper than the premiums
paid for COBRA. However, the fees can still seem high for a person
who just lost his or her job. It may be tempting to forgo insurance
altogether, but financial security is the main reason people buy
short-term health insurance in the first place.
"Many people don't understand the trade-offs
between the cost of a doctor's visit co-pay (under employer-sponsored plans) versus
the true expenses of a catastrophic illness," says Andrews. Without
coverage, an unexpected trip to the hospital could send a family several thousands
of dollars into debt. Several published studies cite medical bills as a leading
cause of bankruptcy. Short-term health insurance is designed to cover these catastrophic
events. "It is financial protection that also happens
to protect your health," Andrews says. Beyond financial
protection, temporary insurance can also help prevent future insurance claims
from being rejected under federal HIPAA, or Health Insurance Portability and Accountability
Act, laws. "An employee can get new health insurance
through their new employer, and it can be a fabulous plan. But if (the employee)
was uninsured for longer than 63 calendar days, the new health plan can deny (his
or her claims) for pre-existing conditions for one year," says Guariglia.
In other words, treatment for existing conditions such as
high blood pressure, allergies or diabetes would remain uncovered for up to a
year after enrolling in a new employer's comprehensive health plan. "It
is a short-term issue," says Guariglia. "But it can be become a long-term
issue with severe financial effects." The good news is
that approved short-term insurance products are "creditable," meaning
policyholders escape the "uninsured" label. This applies even if the
short-term plan never even offered coverage for those same pre-existing conditions.
Of course, the short-term plan would still have to be purchased within the 63-day
limit, and it would have to be a true insurance product, not a private "reimbursement"
product. Private products, also called discount plans or nonlicensed
risk-sharing plans, are often marketed as a way to control medical costs, but
these plans are not licensed by state insurance departments and they are not considered
to be health insurance. "If the plan you bought short-term met the minimum
guidelines for health insurance, you would not have an issue," says Guariglia.
Different states may have different requirements and restrictions, so check with
your state's insurance department for answers to specific questions. State Web
sites also offer extensive insurance information. Where
to find short-term health insurance coverage
"If you are looking
for a personal touch, perhaps your agent would be the best place to start,"
says Andrews. Agents and brokers have knowledge of the different
regulatory requirements in your area, and they should be able to explain how those
requirements affect your coverage. Contact your existing car or homeowners insurance
agent, or even the agent who handles your former employer's insurance. If they
can't sell you a policy directly, they are probably able to recommend an experienced
professional who can. | 
