4 Reasons to Get Short-Term Health Insurance

Short term health insurance is designed to cover you while you are in between permanent health insurance plans. Most users of short term plans are temporarily unemployed. It is tempting to simply go without insurance during this short term period. However, not only is this risky, a national mandate for health insurance will be complete by 2014. Temporary health insurance will become all the more critical once this mandate is fully functional. Mandatory or not, though, having health insurance is critical to protecting yourself and your family. Consider these reasons to get a short-term plan:

#1 Risks of Coverage Gaps

Many people think they will simply avoid the doctor when they have a gap in health care coverage. The main reason to purchase insurance, though, is not to cover yourself if you get a cold or need antibiotics. The main need for insurance is in case of an extreme emergency. A car accident can put you into years of debt. Hospital bills for this type of emergency can total in the hundreds of thousands of dollars. Even the most careful individual can be in a major accident, and this type of need is well worth catastrophic coverage rates.

#2 COBRA Extension Benefits are Affordable

If you lose your job, you are eligible for continuation of coverage through the COBRA program. With this program, you can continue your employer's insurance for a limited period of time. You will have to pay 100 percent of the premium, but this is still reduced since you are technically on a group plan. You are eligible for COBRA benefits even if you leave your job voluntarily in some scenarios. While the cost can still be high, if you only need coverage for a short period of time, this option often presents the least amount of hassle. 

#3 You May Receive Involuntary Unemployment Cost Reductions

If you lose your job due to a layoff, you may be eligible for up to 60 percent premium reduction on your COBRA benefits. With this option available, it is unwise to simply allow yourself to be uncovered. Nearly any individual with any income or savings can afford this plan, which typically amounts to less than $200 per month. For a short period of time, your total coverage could cost less than $500. Since you are receiving an extension of your employment benefits, this low cost coverage will still give you benefits such as covered doctor's visits and prescription insurance.

#4 There are Many High Deductible Insurance Options

If you are still wary about continuing your coverage under the COBRA option, you may want to look into coverage for emergencies only. This option, referred to as high deductible or catastrophe only, will be the lowest cost but still protect you in a major emergency. With premiums under $100 per month, catastrophic coverage will protect you from a lifetime of debt if an emergency should occur. It is well worth the small premium to assure this happens. Once insurance mandates are in place, high deductible options will still cover you in the eyes of the law, making this the most affordable solution for short-term health insurance.

Is individual short-term health insurance more expensive than regular insurance?

Individual short-term health insurance is more expensive than most group insurance plans. Group insurance plans take advantage of wholesale pricing, making the cost for each individual participant much lower. When you purchase insurance on your own, you will be paying full price. Thankfully, there are options to continue your group insurance rates in the short term. For example, the COBRA program allows you to stay on your group plan when you leave a job. If you leave involuntarily due to a layoff, you may even qualify for a 60 percent reduction in premiums thanks to a federal program.

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