Pros and Cons of Short-Term Health Plans

Tomorrow is not always certain. If there's one area that best relates to this phrase, that's your health! Adequate health insurance becomes even more crucial as we age and face a higher risk of falling sick. This is not to mention the spiking costs of health care around the globe year after year.

And even with standard coverage available, there comes a time when you need temporary coverage, say when you are in-between jobs or waiting for coverage to start. This is where short-term health plans or 'gap plans' come in handy.

When contemplating whether to get one, here's a quick overview of how short-term health plans work, with a larger bias on the merits and demerits.

Short-Term Health Insurance Plans at a Glance 

Short-term health plans can be an optimal choice in particular circumstances. For instance, if you're between jobs or awaiting enrollment in a more permanent plan, these short-term options offer coverage during uncertain times.

With coverage durations ranging from one month to a year, they often provide benefits for urgent care and emergency medical assistance.

Pros of Short-Term Health Plans

Short-term health insurance has numerous benefits depending on an individual's unique circumstances. Let's delve into five key advantages:

Quick and Easy Enrollment

Unlike standard plans, short-term health insurance offers swift enrollment processes, sometimes providing coverage as soon as the next day. This is crucial if immediate coverage is needed.

Access to Diverse Networks

One key benefit of short-term health plans is their extensive provider networks, which often surpass the reach of conventional ones. This provides you with a wider array of health care providers to choose from. This means you have a broader choice of health care providers. 

For holders of Medicare who seek out supplementary insurance, Medigap's agents can even assist in navigating this wider network to find health care services attuned to your needs and preferences.

Lower Premiums

These insurance plans typically come with lower premiums than traditional plans. They are thus more affordable and particularly appealing to individuals currently not earning a substantial income for one reason or another.

Flexible Coverage Periods

Unlike regular health insurance, which binds one into year-long contracts, short-term policies offer flexible contract lengths from a month to almost a year—an ideal option when covering gaps between annual plan enrollments.

Emergency Coverage

Short-term health plans provide essential support during medical emergencies and unexpected occurrences. Though they might not support routine checks or preventive services, they could make a mammoth difference during critical medical situations.

Therefore, for those between comprehensive health care plans and in need of a safety net against unexpected health crises, temporary plans can offer needed relief.

Cons of Short-Term Health Plans

While short-term health insurance plans have advantages, they also have limitations. Below are a few of these shortcomings that are important to consider:

Lack of Comprehensive Coverage

Short-term plans focus primarily on emergency coverage and often exclude preventive or routine services. You might need to pay out-of-pocket for regular check-ups and preventative health screenings.

Pre-Existing Condition Exclusions

Unlike standard health insurance policies, temporary plans usually do not cover pre-existing conditions. If you suffer from any chronic diseases or ongoing medical issues, these costs could end up being entirely your responsibility.

No Prescription Drug Coverage

Prescription medications can be expensive, and most short-term health insurance plans do not include any provision for this expense in their policies.

Limited Duration Coverage

Though the coverage flexibility can be a pro for some, the limited duration nature of these plans means constant renewals or switches as per the specific circumstances, which may lead to coverage inconsistency.

Unexpected Out-of-Pocket Expenses

Given the basic coverage nature of short-term health insurance, unexpected out-of-pocket expenses can surface due to uncovered medical scenarios under such policies.

Are Short-Term Health Plans for You?

Clearly, these temporary plans can be a lifesaver in a myriad of situations, including medical emergencies. They're easily accessible, more affordable, and often offer flexible coverage options.

However, keep in mind that, unlike comprehensive plans, they don't cover pre-existing conditions or preventive services. With their limited duration and specific coverage extent, short-term health insurance serves as a temporary safety net during transitional periods of your life.

Also, understand that health insurance, including Medicare, provides limited benefits for long-term health care. Long-Term Care Insurance is a different product that would pay for long-term care services.

Hopefully, the above few pointers will help you make an informed decision regarding protecting your well-being with health insurance.