A major benefit of being a fulltime employee at an American corporation is the security of health coverage. Medical costs along with the cost of health insurance have skyrocketed in the past 60 years. Under these circumstances, insurance coverage provided by employers, who enjoy tax benefits for giving health benefits to their workers, has helped foster loyalty and reduced the financial stress of thousands of American employees, many of whom would not be able to afford health insurance if purchased privately.
Just how expensive those skyrocketing insurance costs really are becomes painfully obvious when someone loses a job. The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), requires insurance companies to continue to make their plans available to former employees who have left a group policy due to unemployment. However, when you sign up for COBRA, you suddenly find yourself paying much more for your health coverage than what you were paying at the time you were employed. The financial burden can be unbearable, as at the same time you have probably lost your primary source of income. The national average cost per family for COBRA is in excess of $500 a month. For a relatively healthy person who rarely visits a doctor, the cost of COBRA may seem unacceptably high.
However, thousands of people who have opted not to continue with their health insurance because of its costs have come to regret the choice. In fact, every 30 seconds someone in the United States files for bankruptcy following a major medical emergency. The vast majority found themselves seriously sick or injured without health insurance coverage. Fortunately, an inexpensive alternative to COBRA exists that can fill in the gaps between jobs. Temporary low-cost health insurance typically has a much higher deductible than COBRA, but also very affordable rates. It’s possible to receive coverage in a matter of days, if not hours.
Who generally purchases short-term temporary health insurance? The list includes people who have left a company for another job or were laid off, students wh are about to graduate from college and need a plan to cover them after they leave school and before the enter the workforce, spouses waiting for coverage from a wife or husband, young adults who are coming off parents’ health plans as a dependent, employees who are now working part time or as temporary workers, and other people who are waiting for permanent health insurance to commence.
While the affordable prices are attractive, it’s important to remember that temporary low-cost health insurance is considered a “stop gap” for individuals who are between jobs that normally provide complete healthcare benefits. These policies are not designed as a long-term solution.
Who Qualifies? Everyone who is young and healthy probably qualifies for temporary low-cost health insurance. Those that likely may not qualify include someone who has a pre-existing condition, is over the age of 65, or who has been rejected for insurance before. Pre-existing conditions are generally defined as any condition or symptom which you had during the 3-year period prior to the start of coverage.
Generally, the holder of a temporary low-cost health insurance policy should plan on having the policy a year or less. Some policies do last 2 years, and rarely last for 3 years or longer. Many policies allow people to renew after the policy has run its course, but usually customers are limited to renewing a policy only once.
Temporary low-cost health insurance policies apply on a per-illness or per-injury basis. You will likely be required to pay a deductible, with your insurance company paying some portion of the next $5,000 in healthcare expenses, before 100 percent coverage takes effect. Plan maximums are typically $1 million to $2 million. Healthcare expenses ranging from emergency services to surgery, prescription drugs to hospital care are typically covered by the policies.
If you do have a pre-existing condition, it’s unlikely you will qualify for temporary health insurance. But it’s still too financially risky to function without some kind of insurance coverage. Your best option may be to apply for a low-income health insurance plan. Medicare, a health insurance program of the federal government, covers senior citizens aged 65 and over, as well as the disabled of any age. Medicaid is usually available for pregnant women, depending on a woman’s income and family size.
