How Quickly Does Coverage Start With Short Term Health Insurance?
If you need individual health insurance right away, there’s only one viable option: a short term health plan. These policies often provide coverage that starts almost immediately. However, quick turnaround time for these plans usually includes a few caveats that you should know about before you sign up.
Next-Day Coverage
Open enrollment is the specific time of year when you can sign up for a standard health insurance plan. It’s held near the end of each calendar year, and unless you experience a major mid-year life change, such as a marriage or the birth of a baby, it’s the only time when you can sign up for non-group major medical coverage (insurance that isn’t bought through an employer). Then, once you’ve enrolled for one of these plans, you still have to wait for your policy to take effect. For example, if you sign up during open enrollment in November, your new plan won’t begin until January 1 of the upcoming year. If you want health insurance right away and you don’t already have something in place, waiting for open enrollment and the policy’s effective date can leave you without coverage during the interim.
Fortunately, short term health insurance plans don’t work like that. Instead, they are available to new subscribers at any time during the year. When you decide you need coverage, you can apply for a temporary health insurance policy. This is helpful if you suddenly lose your healthcare policy through work or get dropped from your Obamacare plan because you missed a premium payment.
Keep in mind, however, that losing employer-sponsored insurance is considered a major life event that qualifies you for a special enrollment period. You could sign up for a major medical individual health plan at that time. Forgetting to pay your insurance premium does not grant you the same opportunity.
Furthermore, as long as you apply early enough in the day for your application to be processed, most short term insurers offer plans that start as soon as the next day. If being uninsured makes you nervous, the option for nearly immediate coverage can quell your fears.
Acceptance Requirements
This quick turnaround time works only if you get approved for a temporary health plan, of course. Unlike traditional health insurance plans, short-term policies are medically underwritten. If you don’t meet the insurance company’s health standards, they can deny your application or refuse to cover medical problems that they consider pre-existing. An exception to this is a short term plan called Connect Plus, which is offered by The IHC Group. This plan will cover medical bills associated with a pre-existing condition up until a certain dollar amount.
When you apply, you’ll have to answer a series of health questions. Your responses will determine whether you qualify for coverage. Other factors that influence approval may include gender or age. The insurance company may want to know your health history reaching back as far as five years, but some take into account only the problems that you’ve experienced in the last 12 months. Health conditions that often get applicants turned down include:
- Diabetes
- Pregnancy
- Chronic obstructive pulmonary disease
- Cancer
- Heart disease
- Drug abuse
Even more minor conditions, such as allergies or sleep apnea, could cause you to be denied a policy. Don’t think that omitting information is the way to go to get approved. Insurers can consult medical records and online databases to confirm your medical history. Even if you get accepted for a plan right away, your short-term insurance company has the right to later rescind your coverage if they discover that you lied on your application. In addition to owing money for any bills paid on your behalf, you could also face legal trouble for having committed insurance fraud.
Pre-Existing Conditions
Most short term health insurance plans don’t cover any symptoms or conditions that began before the first day of your policy. Even those policies that do cover limited pre-existing conditions set a cap on how much they will pay for related treatments. In other words, don’t wait until you’re sick or hurt to take out a short term insurance policy. Getting coverage at the last minute won’t do you any good.
If the insurance company receives a bill for treatment right after your policy goes into effect, it will probably request a copy of your medical records from the doctor in order to confirm that your symptoms really are brand new. Suspicious claims will most likely be denied, and you’ll be stuck paying the bills yourself.
Waiting Periods
In fact, many short term health plans enforce waiting periods to discourage this sort of misuse. A common arrangement is for a plan to cover claims related to injuries from the first day of the policy but not to cover illnesses until the fifth or sixth day.
With a plan like that, if you break your leg on the same day that your policy begins, the treatment will be covered – assuming that your policy includes emergency services, that is. However, if you come down with strep throat that same day, neither your doctor visit nor your diagnostic test will be covered. Get sick a week later, and the policy might pay for both of those things.
Some policies impose an even longer waiting period for serious illnesses. For example, coverage for cancer treatments might not kick in until you’ve held the policy for 30 days. Considering that a temporary health insurance plan can currently last no longer than three months, a month-long waiting period represents a significant portion of the coverage period. Proposed rules under the Trump administration would lengthen short term policies up to a year. Waiting 30 days isn’t ideal in any scenario, but at least these longer waiting periods wouldn’t take up a third of the policy once the proposed rules get finalized.
If you think that a temporary health plan is your best option during a gap in coverage, it’s a good idea to apply sooner rather than later. Although short term health insurance plans can begin at any time and take effect in as little as one day, your treatment probably won’t be covered if you wait until you’re sick or hurt to apply. But if you’re currently in good health, it’s reassuring to know that you could likely apply today and receive coverage that begins tomorrow.