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Choose the right short term medical insurance

Tony Novak,, CPA, MBA, MT, Certified consumer-driven health plan adviser  
revised 10/12/2012


Since passage of the Patient Protection and Affordable Care Act of 2010, the importance of coverage under short term medical insurance. An average person has a gap in health insurance seven times during their working career, according to the health insurance industry reports. This gap can be caused by a change in employment. Under the law, maximum protection is available only to those individual who minimize the gaps to no longer than 63 days and provide proof in the form of a "Certificate of Creditable Coverage" for prior periods. Without this proof, employer and individual insurance plans require a waiting period of up to 18 months before coverage is provided for pre-existing medical conditions. The new federal law and various state laws strengthen this key provision of health insurance. Fortunately most Americans are eligible for affordable short term coverage for periods of one to twelve months. These plans are primarily offered online with printable ID cards and policy documents delivered electronically to ensure efficient service and privacy of personal information.

Since most state insurance exchanges offer more than one type of short term medical insurance, how can you make sure to find the best policy? What is the best choice to save money now but maximize coverage for the future? To save search time and arrive at the best decision, focus on these five key issued in the order they are presented to arrive at the best policy.

  1. Find what's available in your state. State laws about required coverage vary and so even policies from the same insurance company often differ in price and coverage from one state to another. The majority of states offer three or more short term coverage choices. Six states do not authorize any type of short term medical insurance. See a summary of choices on the state insurance exchange pages at for the plans available in your state.
  2. Consider your specific medical situation. If weight is an issue, for example, IHC short term medical insurance is currently the only plan that does not have body build and weight limitations and does not inquire about whether an applicant has been previously declined for other health insurance. If this applies to you, the choice is easy. Coverage can be offered for up to 12 months, but some states require this coverage to be provided through a combination of two successive separate six month policies. Individuals under treatment for high blood pressure, cholesterol or non-insulin diabetics should use Secure Short Term Medical Insurance from Standard Security Life Insurance.
  3. Consider cost-saving options. For healthy applicants who have several choices of coverage, price may become the most important consideration. Standard Security Life offers plans with design options geared toward trimming cost without losing the most important catastrophic coverage. One called "STM Lite" limits benefits to $750,000 to reduce premium cost.
  4. Consider other states' plans. Since short term insurance plans are designed to be portable, it might be worthwhile to obtain coverage while travelling in another state. There is no requirement that the policy be issued at your permanent legal residence so applicants commonly purchase coverage while on vacation, at school, or while travelling for other purposes. In this case the availability of coverage is governed by the address of current short term residence, not the permanent legal residence. Once issued, however, the coverage is valid in all 50 states, including the location of the permanent legal residence.
  5. Be aware of the implications of limited benefit medical insurance plans. The growth in popularity of mini-med plans, also referred to as student health plans, supplemental insurance or scheduled medical benefit plans, can be a trap for some. While these plans represent valuable coverage in many cases, they do not provide an acceptable Certificate of Creditable Coverage and therefore do not satisfy the continuity of coverage requirement of public or commercial health insurance plans. When finances permit, remember that limited benefit plans can be combined with short term or renewable major medical insurance to boost the overall level of coverage. This can reduce or eliminate the financial risk of high deductibles and co-payments and even provide some extra cash to replace lost income during periods of medical treatments.

Some short term medical plans offer ancillary dental and vision benefits and a choice of prescription plans. Regardless of the plan or options you select, remember that the primary benefit is to protect your right to resume immediate full coverage of pre-existing conditions once you return to a regular renewable group or individual health plan. The goal is to get the most benefit possible - both now under the less expensive short term coverage and then later under a more expensive renewable plan.

This brief article does not cover the many coverage interactions and limitations of possible combinations with COBRA, HIPAA, PCIPs and other public health plans. For help with specific questions about insurance and your medical insurance options, OnlineAdviser independent enrollment support service offers free e-mail support 24/7 for fast response and limited toll-free telephone support.  

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