Nothing’s perfect.
We think short-term health insurance is a great plan that can help a lot of people.
We talked about it here. Told you what to look for and how to compare plans here. And made a short video about it here.
You get the idea. We’re fans. But we also believe in being honest and transparent, so there are a few things you need to know before you buy a short-term health insurance policy. So…
The disadvantages of short-term health insurance
1. Your application could be declined. We always try to make a point of saying that short-term plans aren’t for everybody. There are certain medical history issues that could result in you being declined. These would include conditions like diabetes, cancer in the last 5 years, and that sort of thing.
How is this possible? Because these plans are in place for less than 12 months at a time, they are not subject to all of the new rules of Obamacare. If you’re concerned about this, you can find a sample application we posted here. Or you can contact us.
2. It will not cover pre-existing conditions. If you have more minor pre-existing conditions (say, allergies), you can get coverage but pre-existing conditions are excluded.
Remember, the main goal of health insurance is to protect you from the (high) cost of unexpected medical issues. While it’s not ideal to have something excluded, you mainly need protection from what might happen in the future.
3. These plans are not Obamacare compliant. So they do not fulfill the “individual mandate” as set forth in the Affordable Care Act, meaning you will probably have to pay the penalty on your taxes for not complying.
While that’s no fun, most of our clients have found that they still save a considerable amount of money going with a short-term health insurance policy instead of a compliant plan, even when they factor in the penalty.
Our Conclusion
You need to know the disadvantages so you can make an informed decision.
Many of our clients have found that the benefits of a short-term health insurance policy outweigh these disadvantages. Those benefits are primarily related to the savings. In fact, the first two reasons listed above are a big part of the reason that these plans can save you so much money.
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There’s also another significant fact to consider:
When we are outside of the Obamacare open enrollment period (as we are for the remainder of this year)… this is probably the only way you can get major medical insurance coverage.
And a short-term health insurance plan is definitely better than nothing!
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