Pros and Cons of Short-Term Health Insurance

Short-term health insurance (also called temporary health insurance) provides coverage for limited periods of time. It can be invaluable in some situations, but be sure that you understand its pros and cons before you buy.

Short-Term Health Insurance Pros

Useful during Transition Periods. A short-term health insurance policy may be a good solution to fill a brief gap in coverage, for example, for a graduate, an individual who is between jobs, or one who is starting a new job for which health coverage has not yet started.

Inexpensive. Short-term health insurance generally is far less expensive than permanent or comprehensive coverage.

Flexible. Short-term health insurance can be for a term as short as one day or as long as six months to a year (and occasionally longer).

Quick and Easy to Obtain. Short-term health insurance policies usually are relatively easy to obtain. They are offered by many companies and don't require a physical exam. You may be able to purchase one online with coverage effective within 24 hours once your application is accepted and you pay the premium.

Available to Those with Pre-existing Conditions. You probably can obtain short-term health insurance even if you have a pre-existing condition (although expenses related to that condition probably won't be covered).

Short-Term Health Insurance Cons

Gaps in Coverage. As mentioned previously, although those with pre-existing conditions may be accepted for temporary health insurance, any expenses related to the pre-existing condition will not be paid. Also, most short-term health insurance policies pay for major medical expenses and don't cover wellness care, preventive care, or vision and dental expenses. However, some insurers may offer add-on vision and dental coverage for an additional premium.

Limited Life. Short-term health insurance by definition is not a permanent solution to individual health insurance needs since it generally cannot be renewed at the end of its term.

Could Negatively Affect Future Insurability. If you develop a serious medical condition while covered by a short-term health insurance policy, it may be more difficult for you to obtain comprehensive or permanent health insurance in the future, since the condition is likely to be considered pre-existing. However, this situation may change if Federal health insurance legislation passes requiring insurance companies to cover pre-existing conditions.

In conclusion, short-term health insurance is not a substitute for a comprehensive health insurance policy, but it can provide valuable coverage and peace of mind to many consumers during transition periods when permanent insurance either is not available or is too expensive.

Sources:

Rose Kivi, www.ehow.com, How Does Short-term Health Insurance Work?/eHow.com