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July 26, 2012 - This excerpt comes from a press release from eHealth explaining some of the differences between temporary and renewable major medical insurance.
“Individually purchased short-term health insurance policies differ from major medical health insurance policies in a number of ways. Most short-term policies last between six months and 364 days, and the insurance company is under no obligation to renew a short-term policy once the term of the policy has ended. By comparison, major medical insurance plans cannot be cancelled by the insurer except in cases of continued failure to pay or in case of fraud. While both plan types typically cover routine and emergency care as well as prescription drugs, major medical plans also typically covers preventive care, maternity benefits (in some cases with a rider), brand-name and generic prescription drugs, and chiropractic care. None of which are typically covered by short-term health insurance. Major medical insurance policies issued as of September 23, 2010 cannot place lifetime limits on most medical benefits available, while short-term health plans typically do limit the amount of coverage provided over the term length of the policy.
Enrollment in a short-term health insurance plan makes a person ineligible for any guaranteed issue or HIPAA plans, which a person typically enrolls in after they’ve exhausted 18 months of COBRA health insurance coverage. In scenarios governed by HIPAA rules, application for major medical health insurance or short-term health insurance can be declined, due to pre-existing medical conditions. However, short-term insurance is typically easier to qualify for, the application process is typically much shorter and coverage can typically begin much sooner. Additionally, short-term insurers can grant you coverage but exclude coverage of a pre-existing medical condition, something major medical plans cannot do. Some exclusions may still apply if your major medical plan does not cover pregnancy or labor and delivery, for example. In some instances there may be a waiting period before you’re eligible for certain benefits on a major medical policy.”
As a result of these differences, short term major medical insurance is considered one of the easiest way to save money on health insurance for healthy individuals to cover the gap before heath reform laws take effect in January 2014.
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