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Health Insurance: Short-Term or Comprehensive?

Which is better... short-term major medical or comprehensive or traditional (long-term) major medical insurance? That depends on what you want from your health insurance and why you need it. The trade-offs between short-term and long-term are like the trade-offs between renting and owning a home. There is no one right product for anyone; it will always depend upon what you want and need and can afford. We strongly urge you to discuss this with your Benefitsphere Licensed Insurance Advisor who is trained to help you assess your particular situation and can explain in detail the costs and benefits of different products.

The table below offers a thumbnail sketch of some of the advantages of the two types of Health Insurance and it may help you decide whether short term or comprehensive or traditional (long-term) will work better to meet your individual needs. This outline is general in nature and does not account for some products that have features of both types. Again, your Benefitsphere Licensed Insurance Advisor can fully explain the costs, benefits and limitations of the different products, but this outline can give you a general overview.

Category	Short-Term Health Insurance	Comprehensive or Traditional (Long-Term) Health Insurance
Cost	Generally lower premiums than long-term because it does not cover pre-existing conditions or maternity. Some plans do not cover outpatient prescription drugs to keep the costs down (these plans do offer outpatient prescription discounts); cost is based on your age and health condition at time of purchase, so it typically costs more as you get older	Generally higher premiums than short-term because it covers pre-existing conditions after a waiting period, it offers outpatient prescription benefits and a physician copay plan. Has more coverage than short-term; cost is based on your age and health condition at time of purchase, so it costs more as you get older
Coverage Considerations	With low premiums and high deductibles, short-term policies are designed to be more of a low-cost safety net in case of serious injury or illness than a comprehensive or traditional day-to-day health insurance plan. Benefits are limited and there are strict eligibility requirements to qualify. Additionally, temporary health insurance is just as the name implies, only a temporary solution. While some plans offer coverage for up to a year, most short-term policies offer between one month and six months of coverage.	Affordable premiums and care are available by choosing higher deductible options and a physician copay plan. Prescription coverage is available as an add-on option. The plan will cover pre-existing conditions after a 1 – 2 year waiting period (it varies based on the plan). Maternity riders are also available. If you need health insurance for 1 year or more and can afford a comprehensive or traditional (long-term) health insurance plan in most, if not all, cases it is a better option then short-term health insurance.
Advantages	• The number one advantage is cost. • Another advantage to a short-term health insurance plan is that it works like an "indemnity" plan in the sense that you have no preferred care provider (PCP) or gatekeeper, and you are not confined to an HMO network of doctors. Short-term plans give you the freedom to go to any doctor or specialist you like. • The kinds of treatments covered by a short-term policy are fairly comprehensive for the money. Surgery, hospital care, emergency services, diagnostic tests, prescription drugs (mostly inpatient), follow-up office visits, and even limited mental health care are included under short-term coverage.	Comprehensive or traditional (long-term) health insurance covers comprehensive health care needs. Plans usually cover: • Preventative care, including physical exams, immunizations, and PAP tests, as well as child-wellness care, are usually covered. • Like most individual health insurance policies, pre-existing conditions and current health conditions are evaluated before coverage is granted. However, these plans will cover pre-existing conditions after a waiting period. The "look-back" period for these conditions varies by state, but the most common rule for long-term policies is that providers may exclude coverage for conditions diagnosed or treated within the last three to five years. But will cover the pre-existing conditions after the 1-2 year waiting period. • Maternity care is available at an added cost • Renewable annually • Use PPOs to keep the costs down. Can choose any provider but pay less when a PPO provider is chosen
Disadvantages	There are, however, several areas where short-term coverage falls short of a traditional policy: • Preventative care, including physical exams, immunizations, and PAP tests, as well as child-wellness care, are not covered, except where required by state law. • Like most individual health insurance policies, short-term coverage excludes pre-existing conditions. The "look-back" period for these conditions varies by state, but the most common rule for short-term policies is that providers may exclude coverage for conditions diagnosed or treated within the last five years. Because temporary policies are so short, the exclusion of pre-existing conditions will last the life of the policy. • Maternity care is almost never covered by short-term insurance. Most plans will cover complications arising from pregnancy, but routine doctors' visits are excluded. • Most short-term policies are nonrenewable. If you decide that you want to extend your short-term policy, your provider will make you apply for a new policy. • Most insurers will let you reapply only once, and the two policies together cannot exceed the maximum length of coverage issued by your insurer. For instance, if your insurer issues short-term policies for a maximum of six months, and your first policy was for four months, your second policy will only be good for a maximum of two months. • Some insurers will flatly refuse to issue you a second policy if you filed any claims under your previous short-term policy. Others might offer you another policy, but they will treat any injuries or illnesses that occurred during your previous short-term policy as pre-existing conditions and thus will not cover treatment related to such conditions.	• Cost • Subject to individual underwriting by the carrier (same as short-term policies)
Best Solution For...	• Those Temporarily Out of Work • Students • COBRA Alternative • Waiting Periods in Group Plans • Recent College Graduate • Recently left the Military • Lost Coverage Under Parent’s Plan due to age	• 1099, Self-Employed • Staffing Employees • Part-Time, Unbenefitted Employees • Those in need of comprehensive or traditional medical services • Replacement of a group or individual major medical policy