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A health insurance policy is a cover against the routine checkups, prescribed medicines, and emergency treatments. Health insurance is essential to evade the rising costs of medical treatments.
Short term health policy offers low-cost protection coverage on a temporary basis or for a very limited period.
It can be extended according to the needs of the policy holders.
- As compared to the traditional ones, it doesn't include preventive or diagnostic treatments like routine, dental or optical checkups, and any other work-related injuries.
- It is advisable to carefully study the pros and cons of the policy before opting for it in order to obtain the maximum possible benefits.
- It covers the services of physician's prescriptions, inpatient hospital stays, skilled nursing facility care, and rehabilitation at the lowest possible cost.
Working Criteria of Short Term Insurance Policy
- This kind of short term policy works exactly in the manner of an indemnity plan. It involves low premiums and high deductibles.
- This policy usually offers 80% of the medical reimbursement, but in some cases it pays 100% of the medical expenses.
- An affordable deductible range is provided so that the policy holder can choose and make a decision accordingly.
- It also allows the enrollment of an additional policy after the completion of six months in case of no significant change in the health of the client.
- Normally, the short term health insurance related plans are non-renewable, but they can be renewed up to 36 months if an insured person files any other claim under the cover of the previously opted policy.
- If the person is dissatisfied then there is money-back opportunity provided by few good companies that ensures 100% return value of premium within 30 days.
Shortcomings and Ailments of Short-term Health Insurance Policy
- The major drawback is that it excludes pre-existing conditions of the person who is insured by short term health policy. Most of them are non-renewable, therefore the requirement of new policy arises after every 6 or 12 months of the previous policy.
- Under this policy the insurer could simply refuse to issue another policy even if the holder develops a serious condition all of a sudden, shortly after the coverage is paid. In this case, the insurer normally considers the customer's serious condition as pre-existing factor.
- The temporary policies do not include the expenses of maternity but sometimes they cover up the complications that take place during pregnancy.
- Short-term health plans act as an interim coverage and cannot be used as a substitute of standard, long-term health insurance.
- They are exempt from HIPAA legislation because insurance carriers would not hold any guarantee renewal, guarantee issue and so on.
For Whom It Is Best Suitable
- The short term health policies are best for people who keep changing their jobs or not doing any kind of work on temporary basis. It is for very short duration and requires fewer amounts of premiums.
- It is also suitable for the employers who don't offer health insurance policy to their part-time employees.
- It can also be a matter of interest for graduates searching for jobs.
- However, people can continue with the policy with their previous employer as per the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) until they avail a new policy with another employer.
- The policy offers short-term coverage with lesser premium than Cobra with higher cost.
- Forties short-term health insurance plan is also available and is best suited for people who are temporarily out of job.
- The policy gives freedom to the holders to choose any doctor or hospital within 30 to 365 days.
It also provides some additional benefits such as:
- Accident medical expense that allows 100% coverage of the paid deductibles at the time of accident.
- Dental-Vision savings plan pays almost 50% on every dental and eye care services.
Case Study
Short term health insurance policies allow coverage for 30 to 365 days with lesser premiums and maximum benefits. They act as a practicable option by offering a range of deductibles, a choice of physicians and affordable prescription medicine coverage.
For Example
In 1973 the industry's first ever health insurance plan was introduced by Forties Health. The company basically designed this plan for individuals who are temporarily out of work or on strike, and are waiting for employer group coverage.
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