health insurance on the rise
In addition to face-to-face help, you can shop for
short-term insurance online by typing "short-term medical"
or "temporary insurance" into an Internet search engine.
It is a good way to get a general overview of what's available in
"Many carriers also (sell) direct plans on the
Web," says Grisafi.
Before applying for any policy, make sure the prospective
provider is financially stable.
When getting quotes from insurance companies, Denise
Ramm, an independent broker in Maple Park, Ill., looks for a minimum
"A" rating by A.M. Best. "The rating simply indicates
if a company has the financial wherewithal to be able to pay a claim,"
she says. "Many insurance companies will have (rating) information
in their company profile."
Insurance ratings, and their definitions, can also
be found at the Web sites of A.M. Best and other rating firms.
According to Grisafi, the terms of short-term medical plans usually run from 30 days to a maximum of one year, depending on state requirements. Some policies are designed to provide coverage for a specific number of days, while other policies offer flexible monthly plans.
"With (month to month) plans, we send out a bill, and (the policyholder) decides each month whether or not they will pay to keep it in force," says Andrews. "If they stop paying, then the policy would lapse, but as long as they continue to make the payment, they keep the policy" until the temporary period expires.
Shifting to a long-term solution
Since temporary insurance is only designed to last a few months, policyholders still need to plan for a long-term solution. If you find a new job and enroll in your new employer's group insurance plan, make sure you find out when the new coverage goes into effect.
"An employer might hire a new employee, but it
could be three months or six months until the employee can get on
the company insurance program," says JoAnn Laing, president
of Information Strategies, a publisher of health care-related e-newsletters
in Ridgefield, N.J. This means that there is still a need for
temporary coverage. Laing has found that more employers are offering
this coverage as a supplement to their traditional health plans.
"They are using it to bridge insurance until activation."
Once you determine when your new policy goes into effect, send the short-term provider a written cancellation letter. Most plans require written notices to be received at least 30 days before the policy ends. Be sure that the cancellation date does not leave you with a gap in insurance. Check the policy's small print for any other restrictions.
If you don't have any group insurance options, your next choice is probably an individual plan. This is expensive, but programs are available to offer assistance. For example, if you have accepted a position as a self-employed contractor, you might be able to join an industry-specific association that offers special rates on insurance coverage. Your insurance agent or local chamber of commerce representative would be a good source for help.
If you are experiencing severe financial issues, you could also be eligible for Medicaid or another state-funded insurance plan. These programs offer free or reduced-cost insurance for low-income families. Some are only for individuals with disabilities; others cover only children.
Awareness of short-term insurance is on the rise.
A recent survey by Information Strategies found that only 3 percent
of 18,000 individuals surveyed have short-term insurance. However,
"the number of searches for 'short-term insurance' on our Web
sites has increased four times in the last 12 months," says
It's not a long-term panacea, but workers in transition
are increasingly considering temporary insurance as an interim solution
to ease financial and health-care concerns.