If you have a gap in your health insurance coverage, a short-term health insurance plan can fill it. These plans are designed to provide coverage for a short period of time – maybe as short as one month or as long as 364 days – and you may be able to renew a plan for up to three years. Although short-term health plans may not provide the full benefits of traditional health insurance coverage, they do provide important coverage for unexpected illnesses and injuries.
Here are five reasons you may need a short-term health insurance plan.
1. Job changes can lead to gaps.
According to the U.S. Census Bureau, approximately 55.1 percent of Americans get their health insurance through work. Employers often help pay for coverage, so this arrangement works well for many people – as long as they remain employed.
The coronavirus pandemic and subsequent stay-at-home orders resulted in massive layoffs around the country. Many people lost their jobs as well as their health insurance coverage.
Of course, layoffs and terminations occur even when there’s not a pandemic. Sometimes people want to quit for personal reasons, as well – although this can be hard when they need their job not only for the salary but also for the health insurance coverage.
Short-term health insurance plans provide another option for coverage. These plans can help fill in coverage gaps left by job changes or temporary periods of unemployment.
2. COBRA may be unaffordable.
COBRA continuation coverage is supposed to provide people with a health coverage option after job-based coverage ends. Unfortunately, many people find this option to be unaffordable.
Most employers help pay for health insurance coverage, so workers are only paying a portion of the premium while they’re employed. Once they go on COBRA, however, they can be charged 102 percent of the premium, which includes a 2 percent administration fee.
3. The ACA Marketplace has limits.
The ACA Health Insurance Marketplace provides another source of health insurance. While this is a great option for many individuals and families, it is not without potential problems. For one thing, coverage options are limited. Another possible problem is that you can’t just enroll in a plan whenever you want. Enrollment is limited to strict enrollment periods.
You may qualify for a special enrollment period depending on your personal situation. These periods typically last for 60 days. If you miss that window, you’ll have to wait until the fall open enrollment period, when you can purchase coverage for the following year. And if you miss that window, you’ll have to wait another year.
If you can’t enroll in an ACA plan, or if you can’t find a plan that meets your needs, a short-term health insurance plan might provide you with an option that works for you.
4. An illness or injury can strike anyone, anytime.
If you’re relatively young and healthy, you might think you don’t need health insurance – and you might be wrong.
Illnesses from cancer to the coronavirus can strike people at any age. Injuries are another serious risk. People fall down, get attacked by wasps, break legs – the list of possible injuries goes on and on.
5. Hospital stays can break the bank.
According to Debt.org, a day in the hospital can cost an average of $5,220.
That’s just one day. If you have to stay in the hospital for a few days, your costs will be much higher. Surgeries, tests and other procedures can be unbelievably expensive.
Short-term health insurance can provide coverage so you can get the care you need without going bankrupt.